It’s Time to Reform the Predatory Lending Industry
Interest and fees trap low-income families in a cycle of debt | 850 vehicles a week repossessed by auto-title lenders | Legislature must act
Image: A loan store on South Cooper Street in Arlington. Khampha Bouaphanh Star-Telegram
BY CHRIS TURNER
Special to the Star-Telegram
Can you imagine taking out a $500 loan and it costing more than $1,100 to pay it back?
Every day in the Fort Worth-Arlington metro area, many of our neighbors are doing just that and paying up to 484 percent in interest and fees on small, short-term “payday” and auto-title loans.
These absurd interest rates are completely legal in Texas, due to the inaction of the Legislature, which refuses to pass meaningful reforms to rein in what is largely an unregulated industry.
As a result, payday and auto-title lenders are allowed to charge unlimited interest and fees, effectively trapping low-income families in a cycle of debt.