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Last week’s Weekly cover story, “Wolves in Small Print,” focused on predatory housing loans.


But the payday loan business, of course, has always been a place of sharp teeth and incredibly high interest rates for those who have nowhere else to turn for emergency cash. Now, apparently, the “consumer credit” wolves are wearing slightly different clothing.

The Texas Legislature this year defeated a bill that would have allowed payday lenders – like Fort Worth’s very own Cash America International – to triple their interest rates, to as high as 780 percent for a two-week loan. When that industry-friendly bill died, the little lenders made an end run – they decided to register as “credit service organizations” claiming they help to “improve a consumer’s credit rating.” CSOs are not regulated in Texas; they are more like counseling services. So now if you go to the local check-cashing joint, that advance on your paycheck, at a breathtaking interest rate, is actually a form of loan counseling. The Center for Public Policy Priorities, an Austin think tank, says the average interest rate on a 14-day payday loan is now 511 percent in Texas. And those little loans take $100 million every year out of the pockets of Texans who can least afford it. And to think that this state used to have usury laws, in the bad old days.

Cutting the Cable

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