House Interim Committees Shift into High Gear: 

Pollution and Payday Lenders

Committees of the Texas House are meeting at a feverish pace this month.  Many of the hearings are not city-related, but at least two committees have heard testimony on interim charges of interest to city officials.

House Committee on Judiciary and Civil Jurisprudence

An industrial company pours toxic waste into a city's sewer system. The city soon discovers the cheminals at its wastewater treatment plant. Cleanup costs thousands of taxpayers dollars.

Who should reimburse the taxpayers? State law correctly says the polluter should pay. Chapter 7 of the Texas Water Code allows a city or county to enforce certain hazardous waste regulations in a civil lawsuit for an injuction and/or a civil penalty against a polluter.

The Water Code allows a city to hire outside counsel with the expertise to handle the case.  Of course, the state – through the TCEQ – is actively involved in the case, all money received is shared between the city and the state, and the attorney general has to agree to any settlement amount.

Enforcement under Chapter 7 is a partnership between the state and a city to stop egregious polluters from being subsidized by taxpayers.  And, the statute contains plenty of safeguards that prevent frivolous or excessive lawsuits against businesses.

The House Committee on Judiciary and Civil Jurisprudence met last Friday to hear testimony on an interim charge related to city authority in this area.

Many city and county officials, along with League staff, testified to how local enforcement is holding polluters accountable.  Witnesses testified that local governments are closest to their citizens and best understand the needs in their community.  The civil suits permitted under the Water Code are one of the tools that local officials have to protect their communities.

To watch clips from the hearing, go to http://www.tmltv.org/Judiciary-CivilJurisprudenceOne.html and http://www.tmltv.org/Judiciary-CivilJurisprudenceTwo-html.html

House Investments and Financial Services Committee

On Wednesday May 21, the House Investments and Financial Services Committee held a public hearing on its interim charges, which includes a charge to monitor the agencies under the committee’s jurisdiction.

One of those agencies is the Office of Consumer Credit Commissioner (OCCC).  OCCC has a limited degree of oversight over payday and auto title lending companies operating in the state. The current consumer credit commissioner, Leslie Pettijohn, testified at the hearing.

In her testimony, Commissioner Pettijohn was asked whether city ordinances regulating payday and auto title loans would “override” state authority. The question led to a debate amongst some of the committee members about the concept of “local control.” Commissioner Pettijohn disagreed with the notion that city ordinances would override state authority, but she did state that city ordinances impact the OCCC’s ability to regulate payday and auto title loans.

Specifically, she mentioned that city ordinances have led to inconsistency in product offerings because some payday and auto title lenders are altering the structure of their loans to comply with city ordinances, and that inconsistency has made state oversight more difficult.

No data was cited showing that payday and auto title loan terms are more variable as a direct result of city ordinances, leaving open the possibility that any product inconsistency simply represents the latest business model shift in an industry with a history of regularly modifying its products.

To view a portion of Commissioner Pettijohn’s testimony and the committee’s short discussion over city ordinances, go tohttp://www.tmltv.org/InvestmentsandFinancialServices.html

TML member cities may use the material herein for any purpose. No other person or entity may reproduce, duplicate, or distribute any part of this document without the written authorization of the Texas Municipal League.

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