After a spirited debate and a flurry of amendments, the version of Sen. John Carona’s payday lending bill that passed out of the Senate Monday night was so altered that he referred to the final product as an “ugly baby.” Senators stuck on eight amendments to SB 1247—in addition to the six originally agreed upon by Carona, a Republican from Dallas—to toughen the legislation, ultimately voting 24-6 to pass the measure.
Prior to the amendments, Carona implored his colleagues to be pragmatic and craft a product that could pass out of the legislature’s lower chamber. “Some bill is better than no bill, and my concern is these amendments are going to tilt it to where we don’t have a bill,” Carona said on the floor. “You have to recognize that there’s a tilting point. You can make this so tough that it will be killed.” In other words, don’t let the perfect be the enemy of the good.
Payday lenders provide consumers with short-term, high-interest rate loans. Opponents of the industry claim these products are traps that lend money at usurious rates to poor consumers in need of quick cash. On Thursday, Carona pulled the bill from the floor after a dramatic debate in which he said that senate Republicans who vote no on the bill would signal that “the [Republican] party is backed and bankrolled by payday lenders” and forecast that industry lobbyists would “cripple [the] legislation over the long weekend.”
If by “cripple” Carona meant “encourage senators to amend to the point of infeasibility,” then he might just have been correct. Fourteen amendments were added to the bill on Monday, most of which place more stringent requirements on the payday lending industry, including capping the interest at 36 percent and capping the number of loans a consumer can take out during a week, tweaks that may prove a hard sell in the business-minded lower chamber, which must pass a version of the bill for it to be law. Though Carona has said publicly that he will not support a version of the bill that strips away amendments he has told other senators he will support, with the amendment free-for-all of Tuesday, it’s unclear which promises Carona can actually keep if he wants the bill to pass both houses.
“At this point I would say I’ll work toward all the amendments that were put on, but I don’t want to make any more commitments to uphold a particular amendment just because it gives me less and less to go and negotiate with,” Carona said in response to a question from Sen. Rodney Ellis, a Democrat from Houston, about whether or not he would fight to uphold the language of a particular amendment.
However, one amendment, by Houston Democrat John Whitmire, might be amenable to the payday lending industry. It would prevent state-level regulations from superceding local ones targeting the industry. (The bill in its original form would apply the same regulations across the state.) Whitmire put forth this amendment, he said, as “a common sense measure to allow individual cities to regulate this industry as they choose.” Though the amendment protects municipal control, it also protects the ability of payday lenders to lobby at the municipal level or to operate in unregulated suburbs, a fact which led Carona to openly question Whitmire’s motives.
But after two days of debate on the Texas Senate floor over payday lending, Sen. Carona seemed increasingly unwilling to indulge in any inter-personal drama. When asked if he wanted to accept the last amendment offered, Carona said simply and sincerely, “I leave it to the will of the body. I just want to go home and feed my cat.”