A Victory in the Battle Against Payday Loan Scams (Exclusive Video)
In a Temple, Texas food pantry, it didn't take long for Kristen Bulgrien to discover many of their walk-ins were in massive debt.
"We were finding that a lot of our clients who were coming for financial assistance were in debt to payday lenders and they'd come in for help. And of course we want to help and do all we can, but far better to pass an ordinance that's going to protect people," Bulgrien, the Helping Hands community partnership director, says in Deidox Films' newest documentary, The Ordinance, which documents an unprecedented victory against payday lenders.
By 2015, the number of payday lenders had skyrocketed to an all-time high, equaling “more than the number of Whataburger, McDonalds and Starbucks, combined,” Jennifer Carr Allmon, executive director of the Texas Catholic Conference, announced at a local meeting, as she explained how the industry became so unregulated.
Watch the trailer:
"Payday or auto-title loan is a small dollar loan, a cash advance. You go in and get $300 for an emergency expense, but you're paying $75 every 14 days for the $300 you borrow. The auto title loan is a little bit different. It's a larger loan. So you might get a $4,000 loan, $1,200 is your fee every 30 days, so you can pay back $8,000 and you still owe $4,000," Allmon explained.
The number of payday lenders in Texas has risen exponentially since 2004, when lenders discovered a CSO (credit services organization) loophole in state law which puts no limit on the fee they charge. There are now 10 times as many payday lenders in Texas now.
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An intersection in Temple, Texas.
But communities all over Texas are now winning the fight to protect their poorest citizens from this growing crop of scam artists, as The Ordinance reveals.
Last December, Mesquite became the ninth north Texas city to adopt new rules to regulate payday lending businesses.
"In a time when political disillusionment is growing, this story serves as an important example of how the best, and worst, of our political system can unite a community," Deidox Films stated in the film's press release.
“We were immediately fascinated by who it was that was stepping up to be a voice for change. The alliances formed across ideological, political, and even theological lines are remarkable,” film producer Michael Davenport told AlterNet.
"Currently we're promoting a community screening campaign where organizations or individuals can purchase a license and screening kit to show the film in their own community. We've had a few conversations with people about what can be done in other states, and there are a lot of differences in the details of what can be done. We hope that this story can at least show that individuals and communities have a voice—whether it's interacting with local leaders or all the way up to the Consumer Financial Protection Bureau," Davenport said.
Watch an exclusive clip from The Ordinance:
