Statement of principles for fair lending

The extreme annual percentage rates charged by payday lenders create a painful and false dependence that traps financially vulnerable families throughout our state. It is time to end that cycle and offer families protection from this abuse. The Texas Catholic Conference of Bishops supports state legislation to close the loophole while the bishops across the state support zoning and regulatory ordinances passed by more than 25 cities in order to provide some basic protection for consumers.  The restrictions on expansion and extension of consumer credit are critical for our residents.

1.     Fair loans and associated fees must be reasonably priced, which includes some form of fee limits.

2.     Fair loan products are structured for successful repayment.

3.     Fair loans are made based on a realistic assessment of the borrower’s ability to repay, with loan amounts limited to a reasonable share of the borrower's income.

4.     Fair loans are structured to allow payments to reduce the loan principal without incurring penalty or other fees.

5.     Fair loan terms and conditions are clear, linguistically appropriate, and transparent in all advertising, disclosures, and contracts.

6.     Fair loans are structured to allow the borrower to build a positive repayment history and credit score.

7.     Fair loan terms are transparently regulated and vigorously enforced.