The exterior of a closed payday loan store, now for lease, located along East Northwest Highway in Dallas. Many payday loan stores in Dallas have closed since the city passed a landmark ordinance regulating the lenders three years ago. (David Woo)
If you’re among the growing legions in Texas who have come to understand the real cost of a payday loan, here’s more reason to be ticked — the influence of the payday loan industry’s checkbook at the Texas Legislature.
Texans for Public Justice released their compilation of campaign contributions to gubernatorial candidates Greg Abbott and Wendy Davis based on fund-raising reports through Sept. 25.
By their tally, the payday loan industry has given Abbott $402,959 and Davis $10,500 since 2009. The list of top contributors can be found at this link and here is TPJ’s list of lawmaker/recipients of payday dollars for the years 2009-2012.
This year, the biggest contributor is Trevor Ahlberg at $75,000 to Abbott. Who is that, you ask? He heads Cottonwood Financial (Cash Store) in Irving, and is the subject of this D magazine profile in 2013. TPJ researchers couldn’t find any new payday loan contributions to Davis in 2014, but found $130,222 in new money to Abbott this year.
What these two reports indicate is that money is spread like butter around the House and Senate and touches a lot of people, including members of key state regulatory committees, and knows no party preference. No doubt this is why previous attempts get meaningful payday legislation at the state level seems never to make it out of committee and to the full floor. And the payday industry’s checkbook isn’t just influencing legislation in Texas. It is doing the same in other states, as this recent New York Times story notes.
That’s why the city councils of major cities like Dallas, Houston, San Antonio and Austin and lots of smaller ones around the state have taken on the task of writing tougher payday lending rules. Cities are on the front lines of these issues, which impact families, neighborhoods, crime and overall quality of life. They have a right to do what the state won’t.
The payday industry in Texas is not going to go away without a fight. Thankfully, neither are the cities. A Dallas Municipal Court recently denied motions from a payday lender accused of violating Dallas stricter rules to quash Dallas’ enforcement efforts. It is yet another important legal victory.
The company, CBA Leasing Ltd. doing business as Power Finance, has an interesting link to the state Legislature. It is owned by Houston-area state Rep. Gary Elkins, who has firmly opposed tougher payday rules from Austin, according to the Houston Chronicle who went to his Linked-in profile where they found this:
Elkins did not return calls seeking comment, but his Linked-In profile touts his role in developing the payday lending industry nationally and in Texas, noting that he has “pioneered two industries that became billion-dollar industries.” Under the “specialties” heading of his profile, Elkins writes, “I am very good at figuring out ways around obstacle’s(sic) in business.”
If the fight comes down to lawmakers and the contributions they get from the industry, reform from Austin will be difficult. The good news is that the cities are winning the skirmishes city-by-city and are showing strength in numbers. As I said in this related blog post last week, it is time for cities like Fort Worth, Arlington and Irving to join the cities’ fight.
It is the right thing to do.