In 2007, Congress passed a 36 percent rate cap on payday, auto title and tax refund anticipation loans to the military. The move was prompted by a Defense Department report that stated that "predatory lending" undermines the morale of troops and families." The payday lending industry charges the typical borrowers (non-military) a whooping 500 percent APR, can you imagine the amount of stress this can cause an ordinary family? Many payday loan borrowers take out a loan for a few hundred dollars and end up owing thousands. It becomes a never-ending cycle of debt that can and has lead many people to foreclosure and bankruptcy.
Texas is home to many military bases and military families, that's why, according to The Statesman, Texas Senator Elliot Shapleigh and state Representative Joe Farias are sponsoring legislation that would allow the state's Office of Consumer Credit Commission (OCCC) to enforce the 36 percent federal payday rate cap on certain payday, auto title and tax refund anticipation loans.
The article said:
The National Conference on Insurance Legislators adopted a resolution in March urging "states to modify their statues to allow for full enforcement" of the federal rate cap, noting that only 21 of the 39 states authorizing payday loans have authority to enforce "protection for Service members and their dependents."
Yes, we need to protect the military members and all Texans from predatory payday loan companies. For those who have become entangled with payday loans, bankruptcy does offer relief. Speak with a Dallas-Fort Worth bankruptcy attorney to find out how bankruptcy can help you discharge payday loans and other debt.