Texas Senate Bill SB242

Texas 2009 - 81st Regular

• Filed: 11/10/08

Caption

Relating to the regulation of a person who offers, services, or brokers a deferred presentment transaction.

Impact

The primary impact of SB242 on state law relates to the heightened regulatory requirements for businesses involved in deferred presentment transactions. By requiring entities to obtain certification and providing data on their lending practices, the bill seeks to foster greater transparency in the payday lending industry. This may result in improved consumer protections and enhanced accountability for lenders, potentially curbing predatory lending practices that have been a point of contention among consumer advocacy groups.

Summary

SB242 addresses the regulation of individuals and organizations that offer, service, or broker deferred presentment transactions, commonly known as payday loans. The bill establishes a framework for the certification of such entities by the consumer credit commissioner, requiring them to submit regular data to a centralized database. This initiative aims to enhance oversight of the consumer credit sector, particularly concerning those who provide short-term loans which can be burdensome for borrowers if not regulated properly. The legislation mandates the creation of a detailed reporting system that tracks various metrics related to these transactions.

Contention

Notable points of contention surrounding SB242 pertain to the potential burden on small loan businesses as they adjust to the new regulatory landscape. Critics argue that the certification process and data submission requirements could disproportionately impact smaller operators, limiting access to credit for low-income individuals in need of emergency funds. Proponents of the bill contend that it is a necessary step to prevent exploitation of vulnerable populations by unscrupulous lenders and to ensure a fair lending environment.