HB 3081: undermines hard-earned payday lending regulations in 42 Texas communities

Jennifer Allmon

The Texas Catholic Conference of Bishops opposes HB 3081.

HB 3081 seeks to prohibit local cities from establishing payday and auto-title lending regulations. On its surface, this bill violates the Catholic principal of subsidiarity, which notes that governmental decisions are best made by those closest to those impacted by the decisions – which in political terms is reflected by local control. The bill undermines the efforts of Catholic Bishops and pastors who have partnered with local officials in the face of state inaction on regulating the cycle of debt caused by payday and auto-title lending.

The bill results in preemption of 42 local payday and auto-title lending ordinances that Catholic Bishops throughout Texas have worked to pass in collaboration with other faith and community groups and local elected officials.

Proponents of the bill claim that it is in line with a court decision on the City of Austin ordinance, but that decision is currently on appeal and it would be premature to take legislative action based on one lost case out of 42 ordinances. Further, the ordinances in general remain on strong legal ground, based on the civil challenge that made it all the up to the Texas Supreme Court and every court upheld the ordinances.  In particular, the court ruling on the Dallas ordinance was strong and clearly reasoned. In addition, other municipal courts have upheld the ordinance and the Austin ruling is an outlier that is far from finally decided.

We recognize that it is legitimate to protect the livelihood of working Texans, but it is precisely this concern which moves us to oppose this bill: the TCCB has worked for years to curb the abusive practices of payday and auto title lenders. This bill would provide a path by which the industry could strike down the reforms, and again pull Texans into a cycle of debt. We respectfully urge the committee not to overturn the will of local communities to provide protection to 9.6 million Texans against these predatory loan practices.