What Jesus Would Do to You Guys,I Don’t Want to Know
H.B. 2182 Rep. Kim Brimer (R-Fort Worth)
Jesus threw the money-changers out of the temple, but thus far he has not been spotted at the Capitol, which is virtually overrun this session by loan sharks and their buddies, like Fort Worth Republican Kim Brimer. (We note that they made themselves scarce over the Easter holiday: No sense taking chances.) Brimer’s H.B. 2182 exempts what are known as “sale-leasebacks” from usury laws. In a sale-leaseback, the borrower “sells” one of his possessions, such as an appliance or a piece of jewelry, to a lender and then “leases” it back, eventually paying many times what the item is worth. The result, in effect, is a loan with an interest rate that can exceed 700 percent of the principal, according to a Consumers Union report released in February. No property changes hands in the “sale.” It’s a common scenario in Texas, where loopholes in state law continue to sustain the sale-leaseback: a loan in non-loan clothing that skirts state limits on interest rates and preys upon people without access to more above-board borrowing options.
Sale-leasebacks masquerade under monikers like “gift certificates,” but as Consumers’ Union Senior Staff Attorney Rob Schneider said in a press release, “Make no mistake: they are loans, and usurious ones at that.” Sale-leaseback lenders violate state usury protections while taking advantage of people who can’t always get more reasonable financial services. Luckily we’re not the only ones who think so. Jesus may not be coming, but keep an eye out for Rep. Brian McCall’s (R-Plano) H.B. 1816 and Rep. Joe Deshotel’s (D-Beaumont) H.B. 1809, both of which would close the sale-leaseback loophole for good.
S.B. 842 Sen. Teel Bivins (R-Amarillo)
Class action lawsuits can be long and messy. If Sen. Teel Bivins has his way, they’ll be getting even longer. Bivins’ S.B. 842 and its House companion, H.B. 2072 by Rob Junell (D-San Angelo), would require litigants seeking relief in court to first exhaust any administrative remedies available before the relevant state agency. This means, for example, that a class action filed on behalf of policyholders who have been overcharged for their automobile insurance must first take their case through the Texas Department of Insurance. The agency would in turn investigate the complaint and, if it finds wrongdoing, propose a suitable remedy. The case never gets heard in court as long as the agency grants either “all or a substantial part of the relief sought by the claimant” or “an adequate substitute for the relief sought by the claimant”-the latter of which (here’s where it gets good) “may be adequate even if the relief does not include exemplary damages, multiple damages, attorney’s fees, or costs of court.” If you didn’t get the relief you were looking for, too bad: The agency’s finding is binding if a judge accepts it. Even if a judge does not accept the remedy, the agency has six months to complete this process, during which time your case goes nowhere, witnesses get stale, move away, die, etc.
“There’s no logical reason for doing this in state agencies,” according to Reggie James of the Consumers’ Union, who characterized the bill (filed by Bivins last session as well) as an obstacle to court access and a stalling tactic for defendants. The agency hearing process is not necessarily any more efficient than the class action process, nor are agency investigators any more impartial than juries. In fact, because agencies work so closely with the entities they regulate, their relationship often becomes more cooperative than adversarial. “In the best of all possible worlds,” James said, “agencies would always protect the public, but we know that doesn’t always happen.”
Don’t Send a Boy…
H.B. 2912 Rep. Fred Bosse (D-Houston)
Bosse’s TNRCC reform bill, the product of months of interim research and lobbying by an admirably broad group of interests, is not precisely bad, but it could and should be made better with some much-needed amendments currently making the rounds. These include, among others: 1) Ending the volume discount for pollution. TNRCC fees are levied per ton of emissions, but the largest polluters benefit from a cap on the number of tons that count toward the fee total. This shortchanges the TNRCC regulatory budget while rewarding those who pollute more. 2) Assess cumulative impacts of pollution. Incredibly, TNRCC does not take into account the existing pollution load on an area when evaluating the public health impacts of a new permit or an expansion of an existing one. Each facility is treated as if it were on a desert island, instead of, for example, the Houston Ship Channel. 3) Fund a fully independent public interest counsel. Texas consumers have an independent advocate for insurance and utility matters; they desperately need one for environmental grievances.
As we go to press, the bill is scheduled for a House floor debate, which should be one of the liveliest of the session thus far.