It’s sad that loan sharks can buy legislators in Texas

The Dallas ordinance gives a glimpse of what to expect when a city tries to regulate lending practices. The Fort Worth ordinance is a preview into how the zoning restrictions will fare.

In announcing the suit over the Dallas ordinance, Consumer Service Alliance of Texas spokesman Alex Vaughn said the group had “no other option but to sue the City of Dallas to protect the interests of North Texas consumers who are best served when they are given a variety of realistic credit options and trusted to make financial decisions based on what’s best for them and their families.”

The concern for consumers is an oft-repeated justification for charging triple-digit interest rates on small loans that can trap unwary or unlucky borrowers into a debt spiral so steep that borrowers may pay for years and never put a dent in the loan principal.

Attempts to regulate the interest rates short-term lenders can set have been repeatedly rebuffed in the Legislature. State Rep. Tom Craddick, R-Midland and a former speaker of the house, sponsored such a bill last session, only to watch it die. There was no mystery in the bill’s demise. Between January 2009 and March of this year, payday lenders spent a combined $8.4 million on lobbying, according to a report by Texans for Public Justice, a legislative watchdog group.

Payday lender limits may be borrowing trouble