Payday and auto title lenders in Texas often charge upwards of 500% APR for an average $300 loan. The payday and auto title loan business model is designed to trap people in debt. More than 75% of payday loans are taken out within 2 weeks of the previous loan in order to fill the financial gap caused by the loan itself. Because of the debt trap, in Texas an average payday borrower pays $840 for a $300 loan. Regulatory standards arealready in place for these lenders, but payday and auto title loan operators take advantage of a loophole in Texas law to avoid that regulation.

SB 253 is a bill that the Texas Catholic Conference supports because it closes the loophole that allows payday and auto title lenders to operate without following the regulations outlined in Chapter 342 of the Finance Code. It will be heard in the Senate Business and Commerce committee hearing on Feb. 22 at 8:00 a.m. Bishop Vásquez, Bishop of the Diocese of Austin, will be testifying on this bill in committee. Calls of support  to committee members are critical. Please contact them, using the information in the table on the right and ask for their support. You can use the following message:

"Hello, my name is  Name  and I am a Catholic in City, Texas. I am calling to ask that you support and cosponsor Senate Bill 253. This bill closes the loophole that allows pay day and auto title lenders to operate without following current regulations in law, for example, by charging 300-500% interest rates. The extreme interest rates charged by payday lenders create a painful cycle of dependence that traps financially vulnerable families throughout our state. It is time to end that cycle and offer families protection from this abuse. For more information you can contact the Texas Catholic Conference at 512-339-9882. Thank you for your time."

Please act by March 2, 2011..

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