In Pursuit of Fair Lending in Texas
The Texas Impact Education Fund (Texas Impact) is a statewide religious grassroots network of faith-based leaders who have made a commitment to improving the physical, emotional, and social needs of individuals with an emphasis on social justice issues. In 2012, Texas Impact’s efforts were recognized when the organization received a Roadmaps to Health community grant for its efforts to address the negative impact of predatory financial services, such as payday loans, which threatens the stability of thousands of Texas households—particularly many in low-income communities.
According to Bee Moorhead, Executive Director of Texas Impact, the group was specifically interested in this issue because its research showed that many people seeking the safety-net services that churches often provide had experienced payday loans and/or currently had an outstanding loan. Often people turn to charity and social supports because they are paying substantial percentages of their income to payday lenders. Further, the support and resources they receive are not helping them become more self-sufficient; rather, they are keeping themselves afloat while they pay down staggering predatory loans.
When asked about the project’s biggest accomplishment, Moorhead cites legislation passed in 2011 that requires increased reporting and disclosures from payday lenders. This newly collected information offers an opportunity for deeper policy analysis. For the first time, stakeholders are able to evaluate the fiscal impact of policy variables, which she likened to an algebraic equation, “Now we are able to say based on what we know about X, we can do Y, to save borrowers Z.” This new data analysis “is really helpful to legislators and is what they have been seeking for a long time.”
By educating policymakers and providing more resources and tools to them on this issue, Texas Impact has been successful in making payday loans a high-priority issue. Moorhead says that five years ago no one discussed payday loans. But because of Texas Impact’s outreach and advocacy, those directly affected by these predatory practices are more willing to share their personal experiences and put a human face on the problem—ultimately, this too will help legislators when presented with prospective policies.
Moorhead says the payday lending project was a good fit for the Roadmaps project because payday lending is so closely tied to other types of financial instability. As the County Health Rankings & Roadmaps program shows, financial instability and poverty contribute to an individual’s inability to access healthy food, safe housing, medical care, and the basic goods and other factors we know impact health outcomes.
Immediately after receiving the grant, the organization jumped right into pushing legislation through the state legislature and providing direct education to consumers. While the consumer education made gains, their efforts to get legislation passed was not successful.
After the legislative session, Texas Impact evaluated and modified their approach. They sought to better understand a more complete picture of the industry—not just the statistics and the direct impact on individuals and families, but also what polices have been successful in other states. When they go back to the Texas legislature in 2015, they will be better equipped to provide not only a full picture of the impact of predatory lending, but also some possible solutions to explore as well. Since Texas is such a large and diverse state, the organization is refocusing its efforts on getting a better understanding of regional concerns and needs around this issue as well. By pursuing a wider range of policy solutions that address the problem rather than only attempting to get their legislative priorities addressed in one omnibus bill like they did in 2013, Moorhead believes they will have greater success.
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