The time has come to address high-cost lending which is trapping more and more Texans in a destructive cycle of debt. Payday and auto title lenders in Texas often charge upwards of 500% APR for an average $300 loan. The payday and auto title loan business model is designed to trap people in debt. More than 75% of payday loans are taken out within 2 weeks of the previous loan in order to fill the financial gap caused by the loan itself. Because of the debt trap, in Texas an average payday borrower pays $840 for a $300 loan.

Payday and auto title lenders operate a multi-billion dollar lending market in this state, yet, unlike most other lenders, they are not licensed, regulated or subject to any meaningful consumer protections. In 2001, the Texas Legislature passed a law that effectively capped interest rates and fees for payday loans. To avoid complying with state lending laws, payday and auto title lenders have exploited a loophole, which allows them to continue lending at high rates under the guise of a loan broker, or Credit Services Organization (CSO).

The 500% Interest is Wrong campaign supports local and statewide efforts to curb this abusive lending.