John Carona's Payday Lending Reform Crashed into a Wall of Lobbyists Today

If you want an idea of the near stranglehold payday lenders have on the Texas Legislature, the Senate floor was the place to be today. That's where Senator John Carona watched as his payday lending bill was picked apart by colleagues, many of whom were taking calls from industry lobbyists as he spoke.

Carona's bill was already a mere shadow of what consumer advocates would like. There's no hard cap on interest rates, for example, and, while it limits loan size and imposes a waiting period between loans, the restrictions are soft. Worse, the law would strip cities like Dallas of the right to pass tougher rules.

Lawmakers added a half dozen amendments today to strengthen the bill by, among other things, reducing the ban on municipal enforcement to two years, so that the end product at least represented a step in the right direction. Then, the lobbyists got to work in earnest.

The Texas Observer's Forrest Wilder and Quorum Report's Scott Braddock each tweeted a solid blow-by-blow of the debate.

"The lobbyists are in a frenzy right now," Carona said of their reaction to attempts to strengthen the bill. He noted that industry representatives were literally calling lawmakers on the Senate floor in an attempt to scuttle the bill.

Senator Troy Fraser, a Republican from Horseshoe Bay, was the one who took the floor to ask that a vote be delayed until Monday, which is when things turned ugly.

"Any effort to postpone this bill is an effort by the payday lobby to kill this bill," Carona told Fraser according to the Austin American-Statesman. If that happens, the party will forever be known as the one that's "backed and bankrolled" by payday lenders. (To be fair, the industry's largesse is bipartisan, though Republicans do control more important positions and thus tend to be the primary beneficiaries. Carona himself is a prime example, having collected $140,000 in campaign contributions from the industry since 2009.)

Carona railed against the industry's lobbyists for a while. "The interests behind this bill have hired darn near every lobbyist in this town," he said, going on to warn that, if the Legislature doesn't act now, in two years the "industry will be so much wealthier [and] so much more politically powerful you won't be able to say no."

Then, Carona just about came to fisticuffs with Senator John Whitmire, a Democrat from Houston who also wanted the bill delayed amidst concerns over its effect on local control. They screamed. They yelled. Carona banged his gavel. Then, he pulled his bill from consideration with a promise to bring it back on Monday.

Democracy in action.

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