DALLAS - Two Texas Baptist pastors raised concerns about payday and car title lending practices during meetings with the federal Consumer Financial Protection Bureau leadership in Dallas on Dec. 12.
Jeff Johnson, pastor of First Baptist Church in Commerce and president of the Baptist General Convention of Texas, and Steve Wells, pastor of South Main Baptist Church in Houston, addressed CFPB Director Richard Cordray and other staff members of the federal body which oversees consumer financial products and services.
"Wise federal oversight and regulation are sorely needed." Johnson said during a public hearing. "I encourage you to closely monitor payment processing procedures and any compliance safeguards that may already exist. In addition, I suggest additional federal safeguards to protect the integrity of our payment systems, financial institutions, and consumers."
The hearing primarily addressed force arbitration clauses in contracts used by financial institutions to settle disputes outside of the court, but the subject of payday and car title lending occupied much of the public comment portion of the hearing.
Wells was among a number of faith, non-profit, and other leaders who attended an earlier private meeting with Cordray and his staff; this meeting focused primarily on payday and car title lending practices.
The Texas Baptist Christian Life Commission has supported stricter regulations on payday and auto-title lending in Texas. These businesses are using a legal loophole that enables them to charge fees that can become the equivalent of more than 400 percent in interest, according to Ferrell Foster, acting CLC director.
The CLC has been working with other groups in Texas to close the loopholes and require these businesses to function in a manner more in line with the intent of Texas law.
"These small-dollar, short-term loan products result in exorbitant fees for many of the users," Foster said. "The Texas constitution and Texas Finance Code have set limits on the amount of interest that can be charged in Texas, and there are clear biblical teachings against usury, or the charging of exorbitant fees. The current situation is simply unethical, and it is draining billions of dollars from the Texas economy. We care about people who are being taken advantage of, and we care about upholding the intent of Texas law."
For more information, visit www.texaspaydayloansclc.com.