) The state Office of Consumer Credit Commissioner has advised the payday loan industry that criminal charges may be pursued only in very limited situations where it can be proven that a borrower knew a check would bounce. The Consumer Service Alliance of Texas, a trade association representing 80 percent of Texas payday and title loan companies, is even more strict about the practice.
Members will not threaten, or pursue, criminal action against a customer as a result of the customers default on a credit service agreement, according to the groups website. I think the idea of debtors prison is offensive to most people and thats why we have prohibited this in the law, said Ann Baddour of Texas Appleseed, an Austin-based organization that advocates for the poor. Its clearly established in the law that unless theres criminal intent on the part of the borrower, theres not an option to pursue criminal charges.
Still, payday lenders have found courts and prosecutors willing to take cases.
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Ward Scull III, who runs a moving company out of Newport News, Virginia, says he's "typically a conservative Republican" and "free-market kind of person. " Yet he views payday lending as a workforce development issue that keeps employees mired in debt, and inhibits money from flowing through the state economy.
In 2007, he co-founded Virginians Against Payday Loans to champion state reforms. Now that federal regulations are in play, Scull says, "I never thought I'd be excited to see the federal government stand up and do something. " Get 100 to 1000 in Your Checking Account. Your perfect partner to get you through all kinds of short-term financial crunches.