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Short term loan law supported by industry, consumers

Jun 08, 2011 Todd Milner

The short term lending industry has reached an unlikely consensus with some consumer advocates following the recent passage of a short term lending bill by the Texas House of Representatives. If passed by Texas Governor Rick Perry, the bill will require short term and auto loan title lenders to make more detailed disclosures about interest rates and fees to consumers making credit decisions. Lenders are generally accepting of the proposal, the Fort Worth Star-Telegram reports. "It's important to have clear, simple, standard disclosures so the consumer can make an informed decision," Don Baylor, senior policy analyst at the Austin-based Center for Public Policy Priorities, told the news source. However, some short term lenders, such as Houston Republican Representative Gary Elkins, have argued that there are enough regulations already in place. The legislation will reclassify short term and auto title loans under the new category of credit access businesses, negating their current designation as credit services organizations. Under the umbrella of the present categorization, lenders' fees and terms are largely unregulated.