Once again, the legislature seeks to expand high cost loans

Two additional bills in the Legislature would double the fees allowed under Texas law for a $ 2,000 loan, from an already high annual percentage rate of 35% to over 79%. These bills are of particular concern as many families are struggling to make ends meet due to the COVID-19 pandemic and additional hardship from winter storm Uri.

Our Catholic parishes, schools, hospitals and charities in San Antonio and Texas have stepped up our work during this time of special need, providing millions of dollars in charitable assistance to feed individuals and families, house them and receive care. and the support they need. .

Senate Bill 1089 and its companion, House Bill 2432, would undermine the important community work of our churches and other partner organizations by allowing loans at even higher costs to trap Texans in unaffordable debts, as families begin to have more hope and more opportunities.

What do these bills mean for families in San Antonio? According to data from the Texas Fair Lending Alliance, that means at least $ 1,200 more to pay off a loan of $ 2,000 under state-authorized lending laws. This amount creates an additional financial burden for someone who needs a loan to repair a car, who cannot work to care for a sick child or elderly parent, or who pays an unforeseen expense.

These bills would make approved loans more like payday loans, leading Texas in the opposite direction we need to go. In addition to opposing these bills, we urge lawmakers to oppose any amendment to other bills with the wording of these bills. Instead of making things worse for Texans, we need state leaders to take bold action to tackle expensive loan abuse.

We see the high cost of poverty every day through our work with seniors, young families and others who face a barrier and need help. Over the past decade, we have worked to reduce the abuse of onerous loans in favor of human dignity and the common good. Supporting alternative financial products, like the Saint-Vincent-de-Paul mini-loan program and payday conversion loans, and Catholic charity financial aid programs, are much better options.

Now is not the time to make credit more expensive for Texans. Instead, we need to throw life jackets at families drowned under the current financial burden – to raise families with policies that build financial resilience and well-being.

Archbishop Gustavo García-Siller heads the Archdiocese of San Antonio, which includes more than 700,000 Catholics.

About Christopher Easley

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