Texas Eyes Changes to Payday Loan Regulations
Short term loans are incredibly helpful to anyone in a pinch. However, some borrowers struggle to understand the terms of service and sign paperwork without understanding how interest is accrued or the potential risks. As a result, Texas is starting to take a closer look at products like payday loans. The House Committee recently held hearings regarding Texas payday loan regulations. Testimony revolves heavily around a woman who took out a car title loan in Texas. She understood she would be making monthly payments, but she was apparently less aware of the interest rate. After paying back more than $2,000, she still owed $1,500 and had to turn to her church for financial help. Representative Tom Craddick of Midland is one of the leaders trying to pass a bill that regulates interest rates on short-term loans in Texas. According to Craddick, interest rates in Texas are higher than in any other state. He and others feel the interest rates need to be capped.