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No change for lawsuit lending in Texas

No change for lawsuit lending in Texas
James Jeffrey[1]
Contributing Writer- Austin Business Journal
This email address is being protected from spambots. You need JavaScript enabled to view it.[2]

Legislation to regulate lawsuit lenders failed during regular session despite backing from a broad coalition of business organizations and multiple civil justice and legal organizations.

State Rep. Doug Miller[3]'s, R-New Braunfels, House Bill 1595 — called the Texas Consumer Lawsuit Lending Act by supporters — sought to protect consumers and the Texas legal system from unregulated litigation financing companies.

Supporters argued legislation was needed to rein in[4] excessive fees and interest rates charged for what critics equate to payday loans. The bill passed out of the House Judiciary and Civil Jurisprudence Committee April 29 but went no further. It wasn’t all in vain though, according to Miller’s office.

“Rep. Miller doesn’t want to squander the broad support he was able to assemble,” said Fritz Reinig[5], chief of staff for Miller. “Consumers must be protected. Rep. Miller remains undeterred and will introduce some form of this legislation again.”

Support for the bill came from the likes of the U.S. Chamber Institute for Legal Reform[6], U.S. Chamber of Commerce[7], National Federation of Independent Business[8], Texas Association of Manufacturers[9], General Electric, United Way, Texas Association of Business[10], Texans for Lawsuit Reform and the Texas Civil Justice League[11], among others.

But lenders affected by the bill — which include mainly out-of-state companies such as Oasis Legal Finance LLC, the nation’s largest such lender, and LawCash — countered that it went too far and threatened the industry’s existence.

Another attempt at lending reform this session[12], State Sen. John Carona[13]’s, R-Dallas, Senate Bill 1247[14] that tackled payday lending, also failed. It aimed to create a statewide regulatory framework for payday and auto title lenders and financial institutions that offer short-term loans to low-income borrowers at high interest rates.

Carona cited industry opposition to his bill[15] as a major hurdle. As for Miller's bill, it appears that once it reached the Calendars Committee it succumbed to logistical factors in the form of the proverbial legislative log jam, according to Reinig.

References

  1. ^ James Jeffrey (feeds.bizjournals.com)
  2. ^ This email address is being protected from spambots. You need JavaScript enabled to view it. (feeds.bizjournals.com)
  3. ^ Doug Miller (feeds.bizjournals.com)
  4. ^ argued legislation was needed to rein in (www.bizjournals.com)
  5. ^ Fritz Reinig (feeds.bizjournals.com)
  6. ^ U.S. Chamber Institute for Legal Reform (www.bizjournals.com)
  7. ^ U.S. Chamber of Commerce (www.bizjournals.com)
  8. ^ National Federation of Independent Business (www.bizjournals.com)
  9. ^ Texas Association of Manufacturers (www.bizjournals.com)
  10. ^ Texas Association of Business (www.bizjournals.com)
  11. ^ Texas Civil Justice League (www.bizjournals.com)
  12. ^ lending reform this session (www.bizjournals.com)
  13. ^ John Carona (feeds.bizjournals.com)
  14. ^ Senate Bill 1247 (www.bizjournals.com)
  15. ^ industry opposition to his bill (www.bizjournals.com)
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