|SAN BENITO, October 21 - In 2008, I wrote an op-ed piece that appeared in several newspapers and blogs across the country.
My piece was on how Dave Ramsey, conservative host of a consumer finance show on Fox News Network, had called payday lenders "parasites" and said that they "oppress the poor."
He was referring to a news story in which Arkansas Attorney General Dustin McDaniel announced that was sending letters to "payday lending" businesses operating in Arkansas, asking them to stop the practice immediately since they prey on the poor and charge interest in amounts that vastly exceed the usury limit imposed by the Arkansas Constitution.
Based on the strength of Arkansas Supreme Court opinions, McDaniel demanded that the payday lenders cease their lending practices immediately, void any and all current and past-due obligations of their borrowers, and refrain from any collection activities related to these types of loans.
"These businesses have made a lot of money on the backs of Arkansas consumers, mostly the working poor. Charging consumers interest in the range of 300 to 500 percent is unlawful and unconscionable, and it is time that it stops," McDaniel said. "It is my hope that they comply with my demand but, if they do not, I stand ready to take them to court."
In the same vein, Ramsey, a strong advocate for free enterprise, stated on his program that there is a point where private enterprise can become the predator. He said that, at some point, greed and systematic abuse of fair trade cries out for regulation or, in some cases, outright abolition of an industry for the betterment of all society.
Obviously protecting low income consumers should not be a conservative or liberal issue. I wonder if our new Governor will be so dedicated to the working families of Texas as the AG of Arkansas was back in 2008?
In Texas, currently all manner of payday lending, car title loans and rapid loans continues unabated. As predatory lenders continue to stalk poor neighborhoods throughout Texas virtually unchecked, consumer advocates and legal experts have another opinion.
In a 2008 study by the Brookings Institution calculated the financial impact of payday lending on Austin, Dallas, El Paso, Houston, Fort Worth and San Antonio. In these Texas cities alone, unregulated payday outfits lent $1.14 billion in 2006. Statewide, these outfits lent at least $2 billion. Estimates in 2014 are as high as $3 billion and growing.
As Texas continues to be fertile ground for these lenders, despite a weak economy, low- and moderate-income families are more vulnerable than ever. Indeed, a crisis is surrounding the most vulnerable citizens in our state.
When will the highest elected lawmakers stand up for the working poor in this state? On second thought, specifically, where has Greg Abbott's office been? Isn't the Attorney General's office supposed to protect consumers?
While it appears that Mr. Abbott has made some ovations at regulation of the predatory lenders, there has been far too little. Isn't it high time that as Mr. Abbott runs for the highest elected office in Texas that he takes a stand and a decisive action to rid our state of this pox on poor working consumers?
How, in these times, when even most middle-class working families are extremely vulnerable, do we allow the poorest and least educated among us to be enslaved by an industry while the state appears to be aiding and abetting their continued success? How can we as a state continue to support a business model that literally gouges low-and moderate-income workers while stealing the American dream from thousands of hard-working families?
Isn't it high time for Texans to demand fair lending practices and start offering fair loans that give Texas families reasonable terms, a chance to build credit and an equal shot at the American dream.
Texas workers must be protected from excessive fees for short-term loans. Shouldn't the Governor, Attorney General, and Texas lawmakers enact legislation that eliminates abusive practices? How do we ignore the most fundamental principles governing extension of credit: lending without due regard of the ability to repay. Who among our state lawmakers will come forward and do the right thing for consumers to establish lending protections for all citizens?
Where have you been, Attorney General Abbott? What do you think Wendy Davis? Will you step up to help working families? Take a stand, Mr. Abbott. Take a stand Wendy Davis.
Ron Rogers is a community leader in Cameron County who specializes in financial literacy and housing issues for working families.