Serving the Church in Texas

SB 2178: Should not include payday and auto title lending in its scope

Michael Barba

The Texas Catholic Conference of Bishops opposes SB 2178.

Bill Analysis. SB 2178 establishes that a suit may be filed by a state-licensed business in district court against a municipal regulation if:

  • the municipal regulation is more burdensome than the state regulation, or
  • the municipal regulation would result in an adverse economic impact on the business.

Moreover, under SB 2178, the licensed business must show by a preponderance of the evidence[1] that the local regulation substantially burdens his/her right to engage in work authorized and regulated by the state. If the licensee does so, the municipality must show by clear and convincing evidence[2] that:

  • the regulation does not conflict with state law, and
  • is necessary and narrowly tailored to protect the public’s health and safety.

Cause for Opposition. 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. To date, 42 cities have established regulations to reform the industry and protect borrowers. 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 submit to the Senate Business and Commerce committee that we will remove our opposition if the bill removes payday and auto title lending from its purview.

[1] This standard requires the business to show that a particular fact or event was more likely than not to have occurred; at least 51 percent of the evidence must favor the business’ contention.
[2] This standard requires the municipality to prove that a particular fact is substantially more likely than not to be true; in other words, there must be a high probability of truth. This standard is higher than “preponderance of the evidence,” but lower than “beyond a reasonable doubt,” which is used in criminal cases.

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