Texas House Bill HB365

Texas 2017 - 85th 1st C.S.

Caption

Relating to regulation of certain credit services organizations.

Impact

If enacted, HB 365 will amend various sections of the Finance Code that pertain to credit access organizations, imposing stricter requirements for disclosure of fees and interest rates. The regulations aim to prevent misleading practices often associated with short-term loan providers. The bill underscores the necessity for consumers to be made aware of the financial implications of payday loans, which are generally designed for immediate cash needs rather than long-term financial solutions.

Summary

House Bill 365 proposes new regulations governing credit access businesses, specifically those that provide payday and auto title loans. The bill aims to enhance consumer protection by enforcing greater transparency regarding the fees and interest rates applicable to these types of loans. Credit access businesses will now be required to prominently disclose the cost of services, including a clear comparison with other forms of consumer debt. This change is intended to provide consumers with the necessary information to make informed financial decisions.

Contention

Discussions surrounding HB 365 highlight fundamental concerns regarding the balance between regulation and the accessibility of credit. Proponents argue that increased transparency is essential to protect vulnerable consumers from predatory lending practices. However, some opponents may contend that this increased regulation could reduce the availability of credit for those who depend on short-term loans. They worry that credit access businesses might face operational challenges due to the administrative burden of compliance, potentially limiting their ability to serve customers in urgent financial need.