Catherine Owens only

In most neighborhoods, especially low-income neighborhoods, you don't have to look far to see signs advertising "payday loans" and "title loans." In my old neighborhood, Spring Branch, it seems like there are two or three per block the entire length of Long Point.

Consumer groups hate these places, accusing them of preying on poor people. A United Way spokesman noted examples in the Houston Chronicle, including a "$480 payday loan that soon saw a family paying $186 in interest and fees every two weeks; a $300 loan on which a borrower, three months later, owed $700."

On the other hand, borrowers who use payday and title loans often have poor credit histories, or no credit history at all, and may have few options. For some consumers, a high-interest payday loan on the day rent is due may be a better and cheaper alternative than getting evicted.

A large coalition of churches and consumer groups, the Texas Fair Lending Alliance (Links to an external site.), has pushed the Texas Legislature and city government throughout the state to crack down on what they see as predatory lending practices. The Consumer Service Alliance of Texas (Links to an external site.) represents payday and title lending companies.

Last year, Senator Royce West (D-Dallas) filed S.B. 121 (Links to an external site.), which would have imposed state-wide restrictions on payday lending.

Your assignment, write a 2 - 5 page essay (college-level, double-spaced, etc.) explaining:

1. What you would do to help get this bill passed if you were representing consumer groups.

2. What you would do to change or defeat this bill if you were representing payday and title lenders.

3. Finally, how you would respond to these groups, their arguments and activities if you were a state legislator.

Remember, the assignment is about interest groups. Don't focus on what a ripoff you think payday loans are, or on how consumers ought to be free to make their own choices and how government isn't supposed to be everybody's mom. Focus on how you would manage the issue on behalf of each of the two interest groups.

Submit in Word. Cite your sources.

Additional Resources

The Texas Tribune covered the legislature's efforts on this issue: http://www.texastribune.org/2015/04/29/lawmakers-lend-ear-concerns-about-payday-loans/ (Links to an external site.)

The Dallas Morning News talked about it on their blog: http://trailblazersblog.dallasnews.com/2015/04/lawmakers-face-long-odds-in-effort-to-crackdown-on-predatory-lending.html/ (Links to an external site.)

Note: it says something about this issue that, as you do research for this essay, google "payday loans" at your own risk. Prepare to be deluged with ads trying to sell you one.