GOP Senator Accuses Colleagues of Being ‘Shills’ for Payday Lenders

An ugly scene erupted in the Texas Senate today, with Sen. John Carona (R-Dallas) suggesting that some of his Republican colleagues were “shills” for the payday loan industry and worrying that the GOP would be seen as “the party that is backed and bankrolled by payday lenders.”

After intense negotiations this week, Carona told lawmakers he had struck a deal to pass legislation to reform payday and auto-title lending in Texas. Most of the consumer groups, the cities, Senate Democrats and even the payday loan industry were on board with the “hard-fought compromise,” he said.

“There have been great concessions on both sides,” Carona said. “We can leave this chamber at the end of May and honestly say we made a significant incremental step forward on protecting consumers.”

However, as Carona moved toward a suspension of the rule to bring the bill up for debate, which requires two-thirds of the Senate, he complained that payday-loan lobbyists were calling senators on the Senate floor and asking them to change their votes. He even hinted that two GOP senators were acting as agents for the industry.

“If we don’t do it this time, you won’t be able to regulate this industry two years from now,” he said. “This industry will be so much wealthier, so much more politically powerful that you won’t be able to say no and you won’t be able to draw the line. I know the lobbyists are just in a frenzy right now to try to stir up some action on the floor and get one or two of my colleagues who seem to be working the floor to change their vote.”

Republican Sen. Troy Fraser ($42,000 in contributions from the payday industry between 2009-2012) complained that the legislation was being rushed and asked Carona ($140,000 in industry contributions) to wait till Monday to vote. “I know you’re not down here as a shill for the payday lenders,” Carona said. “This is a stall tactic, and I’m sorry you chose to be the messenger.”

Later, Carona got into it with Sen. John Whitmire, a Houston Democrat. “What’s the rush?” Whitmire asked. “We spent more time on this than water for Texas, highway funding, mental health, why is this bill getting such a high priority?”

Carona responded: “Because the interests behind this bill have hired darn near every lobbyist in this town that needed employment. They are around every corner in this Capitol.”

Despite claiming to have 28 votes for his bill and earlier promising not to pull it down, Carona agreed to wait till Monday to bring it up for a vote. If, he said, he can’t get enough votes to pass the bill, “then we’re going to talk very publicly about what changed the minds.”