Abbott still won’t answer core question on White, “should he resign”?

Since the El Paso Times started reporting on payday lending and Perry’s crony appointee William White, the core issue may be getting lost. As Harvey Kronberg state’s in this video.

“The core of the question here, is it appropriate for someone in the payday lending industry to chair the Texas Finance Commission, which has over sight over the consumer credit division?

Well, not it’s not, and it’s wrong too.  He goes on to say that’s the question that  Greg Abbott keeps avoiding.  Saying Abbott wont’ answer..

Whether it’s appropriate of whether the commissioner should resign?”

Some of the media in Texas got bogged down with exactly how much money Abbott has taken from White ($100K) and that Wendy Davis voted to confirm him – before his corporation was fined $19 million for, among other things, ripping off veterans. But Hopefully with the latest revelation from the Lone Star Project we can get back to the real issue, Abbott’s Green Light to Predatory Lenders.

Greg Abbott’s office issued the key document that has allowed payday lenders to operate outside of Texas usury laws and exploit Texans across our state. A letter issued from the office of the Attorney General carefully lays out that payday lenders in Texas can take advantage of a loophole used by credit service organizations to avoid Texas laws preventing unscrupulous lending. It is essentially a “how-to guide” for payday lenders to expand and grow their predatory lending businesses.

Payday lenders had been nervous about expanding their operations in Texas, but Abbott’s letter gave them the go-ahead they needed. The respected financial industry publication American Banker reported how payday lender Ace reacted to the Abbott letter:

“The Irving, Tex., company originally saw too much legal risk in the CSO setup, in which payday specialists can collect as much as 20% in fees for arranging a short-term loan from a third-party lender. But this month Texas’ attorney general, Greg Abbott, sent a letter to the state’s Office of Consumer Credit Commissioner saying that CSOs are permissible. So on an earnings conference call last week Ace said it will begin brokering loans as a credit service organization sometime in the next two quarters.” (American Banker, February 1, 2006)

Attorneys general in many states act aggressively to reign in abuse by predatory lenders like Cash America and ACE, but not Greg Abbott. In fact, Greg Abbott has been the payday lender industry’s facilitator and protector.

Abbott gave the green light, and pay day lenders hit the gas. Payday lender outlets have proliferated all across Texas during the Perry/Abbott era. In 2004, there were approximately 300 payday lenders in Texas. By 2011, there were over 3,000. Right now, there are more payday lending establishments in Texas than there are McDonald’s and Whataburger locations combined.

So, don’t look for Greg Abbott to jump on the bandwagon to get rid of William J. White or impose any more restrictions on predatory lenders, unless of course the payday lenders themselves or other Austin insiders give him the green light.

That’s right Abbott provided the legal framework for these “loan sharks” to start operating in Texas.  But what this really shows is what’s been the GOP’s agenda all along.  Taking from poor, working, and middle class Texans and giving to the wealthy and corporations.  It’s what they do.  And when Davis, or other Democrats point it out, it drives the GOP crazy.

Brains and Eggs has the most recent reporting on this issue, Abbott escorted the loansharks into Texas in ’06.  What’s telling for now is that Abbott and his campaign still wont’ say whether or not White should resign.

This issue fits very well with Davis’ campaign theme of giving voice to the voiceless.  While the GOP and corporations are colluding together to gauge Texans, nothing is being done to protect consumers.  It’s long past time these kind of issues come to the forefront in Texas politics.

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