Today is Equal Pay Day, the symbolic day when women’s earnings “catch up” to men’s earnings from the previous year. The typical woman working full time, year-round in Texas is paid just 79 cents for every dollar a man is paid, which means she has to work until today to be paid as much as the typical man took home by December 31, 2015.
In response, Senator Rodney Ellis (D-Houston) issues the following statement:
“Last session, I partnered with Rep. Senfronia Thompson to give Texas women another tool to fight wage discrimination,” said Senator Ellis. “We filed the Texas Equal Pay Act because, quite simply, women deserve equal pay for equal work. The bill would afford victims of wage discrimination the ability to seek restitution in less expensive state courts in front of a locally elected judge and jury of their peers. After all, we should be tearing down hurdles to equal pay, not perpetuating those that already exist.”
Senator Ellis continued: “While the bill didn’t pass, I pledge to continue fighting for an economy that works for all Texans – especially our mothers, sisters, daughters, and wives.”
• In Texas, median annual pay for a woman who holds a full-time, year-round job is $36,428 while median annual pay for a man who holds a full-time, year-round job is $46,235. This means that women in Texas are paid 79 cents for every dollar paid to men, amounting to an annual wage gap of $9,807.
• The wage gap can be even larger for women of color. Among Texas women who hold fulltime, year-round jobs, African American women are paid 59 cents, Latinas are paid 44 cents and Asian women are paid 78 cents for every dollar paid to white, non-Hispanic men.
• On average, Texas women who are employed full time lose a combined total of nearly $37 billion every year due to the wage gap.
In March 2012, Margaret Jones, a 71-year-old Austin great-grandmother, found herself in a financial crisis. Her husband had recently passed away, she’d lost a temporary job and she was struggling to live on a Social Security check of $1,160 each month. Jones, who asked that her real first name not be used, had moved in with her daughter but was looking for her own place. She had just enough to cover utilities, groceries, gas for her car and rent, but not enough left over for a deposit for an apartment. Cash Plus, a California-based payday loan franchise, had recently opened a location near her home in South Austin, so one day Jones went in and took out a $225 loan. In a month, she would owe Cash Plus $271.91—an effective APR of 245 percent. Jones hoped to be settled in her new place by then and have her finances in order enough to pay the loan off. But a month later, her financial situation had worsened.
The deposit on her new place was tied up. The electricity bill was much higher than expected. And she’d also taken on an auto-title loan; not keeping up with the payments would mean losing her car. She explained all this to a Cash Plus manager, who persuaded her to renew, or “roll over,” her payday loan by carrying the balance forward and paying $50 in fees.
But then the next month Jones faced the same hopeless prospect. This time she didn’t even have the cash to pay the renewal fees.
“I was in an impossible situation,” she said, “but at the same time I wanted to keep my obligations with these people.” She pleaded for a payment plan but the store manager demanded the full amount.
“What I thought was going to happen was they would have some kind of sympathy for a senior who was living on a fixed income of Social Security and that they would allow me to make some kind of monthly payment.”
Instead, the manager began haranguing Jones over the phone for the full amount of $271. Jones kept asking for a payment plan. One day, he told her, “I hate to do this to you,” but didn’t explain what he was planning to do. After that she didn’t hear from him for a few weeks, until the day he called to give her a “case number” and a telephone number to call. As she would find out later, the man had filed a criminal theft by check complaint against her with a Travis County justice of the peace.
“I was just terrified to the point that I couldn’t eat, my blood pressure went up,” she said. “I was just nervous, scared.”
Jones hunkered down, waiting for something to happen. But nothing came in the mail, no threatening letters or legal notices. In February, almost two years later, she called the Department of Public Safety to see about getting her driver’s license renewed—but DPS refused. That’s how she found out that a warrant had been issued for arrest. As she later discovered with the help of a pro bono attorney, the justice of the peace court had sent her paperwork to a previous address and she’d missed a court hearing. In her absence, the judge had ordered her to pay $981 in court fees and restitution, and issued a warrant for her arrest.
Pursuing, or even threatening, criminal charges against payday and title borrowers is strictly prohibited by Texas law, with very few exceptions. The Texas Constitution unequivocally states, “No person shall ever be imprisoned for debt.”
But new research released this morning by Texas Appleseed shows that criminal charges against payday borrowers for missing payments is common in Texas. Texas Appleseed documents more than 1,500 criminal complaints of bad check and theft by check allegations filed by payday loan companies in Texas between 2012 and the spring of this year. Many of them resulted in fines, arrest warrants and even jail time.
The research builds on reporting by the Observer published in July 2013, which found 1,700 instances in which payday lenders in Texas have filed criminal complaints against customers. The Observerstory prompted an ongoing investigation by the state Office of Consumer Credit Commissioner, which regulates the industry in Texas, into one payday loan business, Cash Biz. It also led regulators to issue an advisory bulletin to lenders warning them to stop pursuing criminal charges against their customers.
Texas Appleseed found 13 different payday loan companies pursuing criminal charges in eight different counties, including Travis, Dallas, Harris and Collin. Texas Appleseed filed a complaint today with the federal Consumer Financial Protection Bureau, the Federal Trade Commission, the Texas Attorney General’s Office and the state Office of Consumer Credit Commissioner. The complaint letter, which includes 700 pages of supporting documentation calls for state and federal authorities to launch an investigation and take enforcement action against lenders abusing the law and their customers.
“In addition to their outrageous rates and lending practices, payday loan businesses are illegally using the criminal justice system to coerce repayment form borrowers,” said Ann Baddour of Texas Appleseed. “This directly contravenes state and federal law, which eliminated debtor’s prisons long ago.”
In one justice of the peace court in Harris County, the group found that arrest warrants were issued in more than 42 percent of the cases and at least six people served jail time. In Collin County, there were 740 documented criminal cases against payday borrowers—636 from a single lender, PLS Loan Store—and $132,000 collected from borrowers.
Consumer advocates say district attorneys and courts are—intentionally or not—acting as debt collection agencies for predatory lenders. A letter from a DA threatening steep fines, arrest and jail time can be a highly persuasive tool. In Margaret Jones’ case, a Travis County constable paid her two visits. The first time she wasn’t home; the second she hurried him inside before her neighbors could see. The constable urged her to contact the court.
She said she fell apart. “I was scared. I cried. I kept saying, ‘Why is this happening to me?’ I was just devastated. Hurt and devastated.”
Eventually, through Texas Appleseed, Jones found a pro bono attorney who agreed to take her case. The lawyer was able to persuade the Travis County Attorney’s Office to dismiss the charges.
Jones said she thinks Cash Plus knew that she would be unable to pay from the get-go.
“If they couldn’t get their money one way,” she said, “they’ll get it another, even if it hurts the poor. That’s what I am. I’m a poor person. And it saddens me” how many people “have become prey to such predatory lenders.”
Because record-keeping is spotty and hot check cases are handled by a patchwork of hundreds of DAs, county attorneys and justices of the peace, it’s likely that the problem is more pervasive, said Deborah Fowler, deputy director of Texas Appleseed.
“We believe that the cases we documented are just the tip of the iceberg.”
By Senator Rodney Ellis, Representative Mike Villarreal, Representative Craig Eiland
In an op-ed published in the Galveston Daily News, Adam Burklund, field organizer for the Consumer Service Alliance of Texas, asserted that we and the “consumer interest groups” we represent defeated the predatory lending reform bill last session. While we would like to revel in any claim that gives us so much power over the Texas legislature, we hate to break it to Mr. Burklund, but the only consumer interest groups we represent are the consumers of our respective House and Senate districts.
To refresh Mr. Burklund’s memory, the bill that he says passed “overwhelmingly” out of the Senate Business and Commerce Committee actually passed 5-3, hardly what we would call a landslide. Furthermore, the compromise bill that Mr. Burklund claims Senator Ellis had a hand in killing on the Senate floor last session actually passed off the Senate floor with the support of 24 senators − a truly bipartisan piece of legislation. Maybe Mr. Burklund is referring to the death of the version of the bill that came out of the Senate committee that contained a little provision that the predatory lending industry was really banking on: the so-called preemption clause.
The preemption clause would have voided any steps that cities had taken or will take in the future to protect their residents against the most harmful practices of the predatory lending industry. At the time that the bill was being debated in the Senate, seven Texas cities had passed similar ordinances to protect their residents, all stronger than what was being proposed in the bill that passed out of the Senate committee. Had that version of the bill passed, those ordinances would have been voided and replaced by substantially weaker statewide legislation. Fortunately, the Senate saw the danger of the preemption clause and unanimously, and overwhelmingly, voted to nullify it.
Since then, eight more Texas cities have passed similar ordinances, including the City of Houston. As of today, 6.7 million Texans are protected by an ordinance that is stronger than what passed out of the Senate committee, and this scares the predatory lending industry to death. This is why the industry showed up in droves and testified for hours against the bill when it was heard in the House committee. It was at this point that the bill never saw the light of day again.
Our actions have never been devious, as Mr. Burklund asserts in his op-ed. We have been very up front and honest with our efforts to push for strong legislation that offers real protections for Texas consumers and oppose any legislation that would actually hinder Texas cities from passing ordinances that are right for their residents.
Mr. Burklund claims that we want to kill the predatory lending industry as it exists in Texas. This is also untrue. We want to change how the predatory lending industry conducts business as usual and see the most egregious of its practices die. In 2012, the current predatory lending business model drained $1.25 billion in fees from working Texas families for loans at 500 percent interest and higher. Business as usual hurts Texas families.
The fact of the matter is, while 15 states and D.C. currently either prohibit predatory lending or have regulations restrictive enough that the industry chooses not to operate in those states, there are nine states that have sensible limitations on fee rates, loan usage, and terms, and the predatory lending industry still manages to exist.
We have always maintained that we do not want the small loan business to go out of business in Texas. We understand there is a need for it in our communities. What we want is for the businesses providing the loans to operate in a responsible, fair, and honest way. The people of Texas would be better served if the industry supported fair lending practices rather than fighting efforts to better the way they conduct their predatory business by penning misleading op-eds and attempting to change easily verifiable facts.
By REP. MIKE VILLARREAL, REP. CRAIG EILAND and SEN. RODNEY ELLIS
We would like to congratulate the City of Houston for passing an ordinance to protect its residents from predatory payday and auto title loans, and we urge other cities in the Houston-Galveston area to do the same.
Last year United Way of Greater Houston and Catholic Charities of the Archdiocese of Galveston-Houston successfully joined with faith community leaders and non-profit assistance programs to urge the City of Houston to pass the local ordinance. These organizations are partnering again this Thursday as Catholic Charities in Houston, 2900 Louisiana St., hosts a 3 p.m. forum where Texas Faith for Fair Lending will hear from clients who have been directly impacted by payday and auto title lending.
Why should other cities in the area pass this ordinance?
Houston, Dallas, San Antonio, Austin, and El Paso have all passed local ordinances to regulate payday and auto title loans. But now lenders in big cities are sending customers from the regulated cities to their stores in neighboring communities, so it is crucial that those municipalities pass ordinances to protect consumers as well. In the Houston area, South Houston already has done so, and Missouri City has taken action as well.
The stories of payday and auto title loan borrowers – like those that will be heard on Thursday at the Texas Faith for Fair Lending forum – well illustrate the need for immediate action by municipal officials.
In San Antonio, for example, a nonprofit organization described one of their many clients who found himself in trouble with a payday loan. A gentleman in his seventies, living only on his Social Security check, took out a payday loan to cover an unexpected medical bill.
As often happens, he couldn’t pay off the loan and cover his other monthly expenses. Before long he had taken out multiple loans and was skipping meals so he could make loan payments!
Of course we wish he had made a better decision about taking out the loan in the first place. We wish he had negotiated a payment plan for his medical bill, borrowed money from a family member, or chosen one of the other options people turn to in states that don’t have payday lenders.
Yes, we need to do a better job of educating Texans about personal finances. But just as we learned during the nation’s subprime mortgage crisis in 2008, we also need basic regulations that help borrowers avoid loans they can’t afford.
The loans, which often have interest rates over 600%, are marketed as emergency two-week or one-month loans backed by the borrower’s next paycheck or car title. But the truth is that the business model actually relies on giving customers loans they cannot pay back on time.
In fact, a recent study by the new U.S. Consumer Financial Protection Bureau found that nearly half of all payday loan customers have more than 10 refinances or new loans each year. Each time the customer refinances the loan or takes out a new one to pay off the debt, he or she pays a new round of high fees. In Texas, those fees are typically around $22 per $100 borrowed.
The excessive fees charged by payday and auto title lenders drain millions of dollars from the local economy and exacerbate the burden on already over-stretched charitable and social service providers. What’s more, dozens of our friends and neighbors have their cars repossessed by auto title lenders, making it difficult for them to even get to work, much less get ahead.
During the last legislative session, industry lobbyists blocked the reform bill we tried to pass. While the legislature is clearly at a stalemate on this issue, Texas cities are not.
The common sense ordinance we recommend limits payments to 20 percent of the borrower’s monthly income, allows no more than three renewals, and establishes other protections to ensure customers aren’t caught in a cycle of debt.
To protect more consumers, we encourage all cities in the Houston-Galveston area and throughout the state of Texas to pass a payday and auto title lending reform ordinance.
By Sen. Rodney Ellis and Rep. Senfronia Thompson – Special to the American-Statesman
Last month, the nation celebrated Dr. Martin Luther King Jr.’s life, achievements and his dream for America.
While most Americans recognize Dr. King as a civil rights leader striving for equality of opportunity, he was also an advocate for the dispossessed, the downtrodden and the forgotten. He championed the plight of the poor, organizing the “Poor People’s Campaign,” pushed Congress for a poor people’s bill of rights, and ultimately sacrificed his life standing up for fair wages with Memphis sanitation workers.
In the nearly 46 years since Dr. King’s death, America and Texas have made great strides in some areas, but only small, halting steps in others. Even in good times, Texas has done a very poor job of providing for the poorest among us. Our rich are getting richer while our poor are falling further behind, too often struggling to put food on the table.
Today, even more so than during Dr. King’s life, the dividing line in Texas is just as much about green as it is black, white, or brown. All too often, it’s not the content of one’s character that matters — it’s the contents of one’s wallet.
More than 4.6 million Texans live in poverty each day, including one out of four children. Texans are laboring harder, but hourly wages, when adjusted for inflation, are falling. At the current minimum wage of $7.25 per hour, a parent with a full-time job still does not earn enough to be above the federal poverty line. It’s certainly not a living wage, regardless of Texas’ relative low cost of living.
We’re not talking about an insignificant number of people, either. With 452,000 Texans paid at or below the minimum wage in 2012, far too many can’t make ends meet despite full-time employment. Those nearly half a million Texans give our state the unfortunate distinction of ranking second in the nation in the percentage of hourly workers who earn at or below minimum wage.
If we are serious about honoring King’s legacy, it’s time we did something about it. A bill pending in Congress would do just that by increasing the minimum wage to $10.10 by 2016 and indexing it to inflation to ensure it preserves its value. After all, the minimum wage has failed to maintain its buying power — the minimum wage of $1.60 an hour in 1968 would be $10.71 today when adjusted for inflation.
Using recent history as a guide, we know the chances are slim that D.C. gridlock will evaporate enough to get this bill passed. Fortunately, Texas can act on its own, just as we pushed it to do seven years ago. When we filed legislation to increase the state’s minimum wage in 2007, we knew it was an uphill climb — and we acknowledge that it still is today, despite poll after poll showing Democrats and Republicans alike support increasing the minimum wage. But an uphill climb alone can never be a reason to not pursue something that will improve the daily life of millions of Texans.
In a recent study analyzing the impact of the proposed increase to $10.10, the Economic Policy Institute found that almost 2 million Texas workers would see their wage increased.
It’s not just teens who would benefit, either. Adults older than 20 make up 88 percent of workers nationwide who would receive a raise if the federal minimum wage were increased to $10.10. More than half work full-time and a full third are older than 40.
Concerns about resulting job losses have largely proved to be illusory, as rigorous research has shown time and time again that that minimum wage increases do not reduce employment.
The bottom line is that the vast majority of Americans have not reached the mountaintop, and it is the job of public policymakers to ensure everyone has access to the tools necessary to make the climb.
Raising the minimum wage rewards the strong work ethic that built Texas, allowing someone who works hard at a full-time job to support a family and the opportunity to access a bridge out of poverty.
Instead of merely celebrating the life of Dr. King with rhetoric, let’s stand together and honor what he stood for by taking meaningful action towards the realization of his dream. It’s time to raise Texas’ minimum wage.
State Senator Rodney Ellis and State Representative Senfronia Thompson are both from Houston.
Senator Ellis and Senate Colleagues call for Chair of Finance Commission to Resign
(Austin, TX) // Senator Rodney Ellis (D-Houston) today joined with Senators Sylvia Garcia (D-Houston) and John Whitmire (D-Houston) in asking William White to voluntarily resign his post as Chairman of the Finance Commission of Texas. The letter comes after the El Paso Times published comments made by Mr. White disparaging the consumers of payday loans. Mr. White is also the Vice President of Cash America, a payday loan company.
“The purpose of the Finance Commission is clearly written in statute. The Commission must protect the interests of Texas consumers, maintain sound banking systems, and increase the economic prosperity of the state. Mr. White’s recent public comments betray this mission and severely call into question his ability to put his outside employment aside and truly look out for Texas consumers,” said Senator Ellis.
Letter to Chairman White:
January 7, 2014
Mr. William White, Chairman
Finance Commission of Texas
2601 N. Lamar Boulevard
Austin, Texas 78705
Dear Chairman White,
We are writing to ask that you voluntarily resign your post as Chairman of the Finance Commission of Texas as soon as practicable. Your recent comments published in the El Paso Times on December 29, 2013 contradict your duties as the presiding officer and member of the Finance Commission and have eroded our confidence that you can perform the responsibilities assigned to you by statute with fairness and without prejudice.
By law, the Finance Commission “shall carry out its functions in a manner that protects consumer interests, maintains a safe and sound banking system, and increases the economic prosperity of the state.” The Finance Commission is also responsible for the oversight of the Office of Consumer Credit, which regulates the consumer credit industry and educates consumers and creditors with the goal of “producing a fair, lawful, and healthy credit environment for social and economic prosperity in Texas.”
Your recent comments betray both the mission and the responsibility of the Finance Commission and the Office of Consumer Credit to protect consumer interests and to foster economic prosperity. In the interview with the El Paso Times, you are quoted as questioning the motivation of payday loan borrowers and suggest that borrowers may be using the loans for less than necessary items. As the presiding officer of the Finance Commission you should be well aware that most consumers of payday or auto title loans use them to pay for unexpected emergencies or for ordinary expenses because they simply do not make enough to make ends meet.
In 2012 alone, 35,000 Texas families lost their cars to auto title businesses, payday and auto title businesses drained $1.25 billion in fees from working families, and 32 percent of non-profit clients requesting charitable assistance were in trouble with payday or auto title loans according to Texas Appleseed. Additionally, women, minorities, and low-income consumers are disproportionately impacted by the negative economic effect of payday loans, often hindering the financial prosperity of these populations and increasing economic inequality. By looking at these shocking numbers, it appears the payday loan industry prospered at the expense of Texas families and communities. By virtue of your current position as Chairman of the Finance Commission, you cannot turn a blind eye to these facts, regardless of your outside employment as vice president of a payday lender.
Furthermore, the resolution passed by the Finance Commission on April 20, 2012 that bears your signature is deeply concerning. It can be argued that this resolution is an attempt by the Commission to influence legislation, which as you should be fully aware, is illegal. The payday industry has fought tooth and nail to defeat the passage of local ordinances, and we are happy the industry’s efforts failed in 11 Texas cities, including, most recently, our hometown of Houston. To pass a resolution that discourages local control gives the appearance that you seek to pursue the interests of the payday loan industry and not Texas consumers. We intend to look further into whether the resolution is indeed an improper and illegal use of state resources.
By requiring by statute that one member of the Finance Commission be a consumer credit executive, the legislature hoped the requirement would bring knowledge and expertise of the industry to regulation enforcement and that any conflicts of interest would and must be avoided. In confirming your appointment as Chairman, as with all our Senate colleagues, we trusted you to perform the duties assigned to the post judiciously with the goal of protecting Texas consumers. Turning the focus and blame towards the consumer as you did in your interview severely calls into question your ability to do so.
Texans deserve a Finance Commission that is looking out for them and their interests. As you have lost our confidence and the public’s confidence to carry out the duties of your office competently, fairly, and without prejudice, we are asking you to resign your position as Chairman of the Finance Commission.
Rodney Ellis Sylvia Garcia John Whitmire
(Austin, Texas) – Senator Rodney Ellis (D-Houston) released the following statement:
“I want to commend Mayor Annise Parker and the Houston City Council for having the wisdom and resolve to pass the Consumer Protection and Regulation of Credit Access Businesses ordinance. Mayor Parker and Council Members faced very strong opponents with a lot of money and influence and should be applauded for doing the right thing anyway. Houston now joins ten other Texas cities that have stepped up to plate and passed a strong ordinance to protect its citizens from the most egregious practices of the predatory lending industry.”
“Last session I, along with members from both sides of the political aisle, opposed an omnibus statewide bill because it was too weak due to industry influence. Plus, it would have prevented Houston from passing just such a strong ordinance that would truly protect our constituents. Next session, I plan on introducing thoughtful legislation that will actually protect Texans and preserve local control. I am very grateful to Mayor Parker and Houston City Council for sending a message to the state legislature that Houstonians will not settle for any less.”
(Austin, Texas) – Following a series of consumer-friendly amendments and a pledge by leaders to maintain those protections, Senator Rodney Ellis (D-Houston) today voted in favor of legislation to enact regulation of predatory lenders in Texas. Continue Reading »
HOUSTON (KTRK) — There’s a new push to bring casino gambling to Texas. The bill, which was introduced by a Houston lawmaker, would expand current gambling laws. But some say it should go even farther. Continue Reading »