Rep. Gary Elkins
As a member of the Texas House of Representatives, Houston Republican Gary Elkins helps make laws. As a businessman, he is an owner of a chain of payday lending stores accused of breaking them.
Elkins opposed payday lending regulations during the 2011 and 2013 legislative sessions, arguing members should defer to his expertise and calling the bills a solution in search of a problem. Efforts at comprehensive statewide reform failed, leading Texas’ three largest cities to adopt their own restrictions on the products payday and auto title lenders can offer.
As the local ordinances have come into force, first in Dallas, then San Antonio and, as of this summer, Houston, Elkins’ Power Finance locations or store employees in all three cities have received citations, accused of ignoring the law by not registering with the cities or allowing regulators to inspect their books.
Elkins’ interests in San Antonio were among the plaintiffs who sued the city of San Antonio over its payday regulations; the case was dismissed last February. The same attorney who represented the lenders in that case, John Dwyre of San Antonio, directed Houston officials in a Sept. 10 letter obtained by the Houston Chronicle not to speak with, ask for identification or request records from Power Finance employees.
Having been blocked from enforcing the ordinance at the firm’s locations, Mayor Annise Parker said, Houston officials now plan to cite Power Finance as a company for failing to comply.
“The city of Houston has worked successfully with Rep. Elkins in other areas, but the fact that he would deliberately flout our local ordinances is not just unfortunate – it sends the wrong signal,” Parker said. “We all understand that the reason that our system of laws works is that people of goodwill voluntarily comply with the law. It undermines the entire system when a public official chooses not to comply with a legally passed law or ordinance.”
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Dallas’ lone Power Finance store in January was issued four citations, three for allegedly violating zoning rules for payday lenders, and one for failing to register with the city. The cases are set for trial next month, said Assistant City Attorney Maureen Milligan.
“Here you have a lawmaker that makes law for everybody else, and then when it comes time for him to follow the law that other people follow, he thumbs his nose at it,” said Dallas City Councilman Jerry Allen, who has championed that city’s regulations. “We’re not going to tolerate it. ”
We should not be surprised by this. Elkins took the lead in fending off payday lending bills in the 2013 Legislature, and has zero shame about it. I don’t quite understand why there hasn’t been an ethics issue relating to this – Sen. Leticia Van de Putte had to sell her pharmacy shortly after being elected in order to avoid a potential conflict of interest, yet there’s Elkins up at the mike pushing his own business interests. It’s nothing new, either. Here’s an excerpt from the Texas Monthly Ten Worst Legislators list from 2001:
In the legislative pond, Gary Elkins is a minnow. he feeds in the shallows, far from the dangerous waters of floor debate and important bills. He’s such a small fish that he escaped the Worst list in 1999 with a onetime catch-and-release exemption—even though no less than the Wall Street Journal had documented his efforts to help the small-loan industry, in which he makes his living (“Legislator’s Slim Agenda Mirrors His Private Interests”). So what does Elkins do this session? He swallows the hook again. Exemption expired.
Elkins’ livelihood is the controversial sale-leaseback business, in which customers, usually low-income, get cash for a household item, which they retain, and pay stiff regular fees until they can repurchase it. The industry claims that these transactions are leases, not loans, and that the fees are not interest payments, which would be subject to regulation. The attorney general’s office has sued Elkins’ company (unsuccessfully), and the Legislature, after several previous attempts, finally gave state regulators authority over the industry this year—but not without some unseemly shenanigans by Elkins. After the chairman of the House Business and Industry Committee, on which Elkins sits, introduced a bill declaring that sale-leaseback transactions are not loans, a lawyer for Elkins’ company testified in favor of the bill—but neither he nor Elkins disclosed the connection. Later, Elkins’ name surfaced again involving a bill backed by the payday-loan industry, a competitor of Elkins’ sale-leaseback industry. A Nevada company with links to Elkins (but no other apparent Texas concerns) had hired a lobbyist to fight the payday-loan bill. Referring to Elkins, an ethics advocate for Common Cause told the Austin American-Statesman, “If I were a member, any bill [he] had would be suspect to me.”
Elkins’ involvement in the issue is not illegal but does create the appearance of self-dealing. It gets in the papers and it lowers public confidence in the Legislature. Perhaps he could be forgiven if he made any noticeable contribution to the public weal, but no. He filed ten bills this session and passed one, making it legal to stop, stand, or park your vehicle in your own driveway in a manner that blocks a sidewalk. If only he had quit while he was ahead.
See also this Observer story from July. The only difference between then and now is that Elkins has since moved into the payday lending business. I don’t know what Houston or other cities that want to rein in payday lenders can do to him. At some point, it will have to be up to the voters to kick him out.
I stand with rep Gary Elkins 100 and 10%=because this had nothing to do with real economic victims =at all=let me ask you a simple question=when have you ever seen a bunch of people protesting outside a cash advance location???it doesnt exist in real life=people of all political backgrounds and non partisan folks know that payday loans are expensive=texans have successfully self regulated without the need for law infusion=thats a fact.
This is about the power house banking industry paying lobbyist millions to restrict the abilty of a person to person loan=period,ive been screaming about this for years =this is texas,real freedom,if you borrow money under the revealed terms(which by state law they have to lay out the terms in plain sight and get your signature before you can recieve your short term loan)then that should remain legal in this state hands down=now then you start showing me even one protest,my god how about one consumer complaint from someone that recieved loaned money then we can talk but i will not allow the houston chronicle to create victims that everybody knows by now just simply do not exist.
rep gary elkins is fighting for all of our freedoms and we should thank him for that.
joshua ben bullard
These loan sharks with usury interest rates have had thousands of complaints. They were illegal until the “greed is good” people said preying on desperate people who needed a bit of money and could promise to pay back double in the future was legitimate business. These criminals have found a welcoming home in today’s GOP.