This week a coalition met to address San Antonio's problem with low-income access to credit. 30 people representing organizations ranging from the San Antonio Area Foundation to the Federal Reserve Bank of San Antonio make up the The Anti-Predatory Lending Coalition which is looking at ways to increase alternatives to payday and auto-title lenders.
They use "predatory" to describe the lenders who charge large transaction fees as well as exorbitant interest rates on their loans.
Alternative lenders would allow people to take out the same low-dollar loans but instead of 300 percent interest rates, organizations like Texas Community Capital envision charging 18 percent. The organization is in the coalition and hopes to partner with an area financial organization to replicate a program in Brownsville that has had great success.
Since Texas Community Capital is waiting to hear from the state regulatory body on lending the Area Foundation wants to push people to take a look at their financial literacy and empowerment programs to better understand their situation in the meantime.
In addition last week in a Bexar County courtroom a judge threw out a lawsuit brought by payday lenders against the city of San Antonio and its ordinance restricting the industry. While legislation to better regulate the industry failed in last year's legislative session, cities like Bryan and and College Station are following San Antonio's lead by passing similar ordinances on payday lenders.
What is possible with these efforts? Have we gotten a handle on how to best help consumers? What can be done to get people out of their cycle of debt?
- Dennis Noll is the president and CEO of the San Antonio Area Foundation
- Matt Hull works with Texas Community Capital
- Ann Baddour is a policy analyst with Texas Appleseed in the area of consumer protection