Giddings’ Bill to Stop Criminal Complaints Against Debtors

Giddings_SmallAUSTIN, TX – Representative Helen Giddings (D-Dallas) brought House Bill 3058 before the House Committee on Investments and Financial Services on April 29, 2015. This bill addresses the practice of certain lenders who attempt to collect unpaid loans by filing a criminal “hot check” complaint for items issued by their customers which return unpaid by their bank.
In a recent study of eight Texas counties (from 2012 – 2014), over 1,500 such criminal complaints were filed by payday lenders against their loan customers. Many received arrest warrants and some were actually jailed.
The checks (or automatic debits) issued by consumers of these loans were usually “post-dated” items and were required by lenders at the time the loan was arranged. Texas law already exempts these transactions from collection through the courts, as they were not issued in an attempt to defraud the lender.
By taking criminal action against these clients, which may result in arrest and imprisonment, these lenders violated a constitutional right of all Texans. “The Texas Constitution,” said Giddings, “clearly promises that ‘No person shall ever be imprisoned for debt’.”
House Bill 3058 would create a criminal offense against lenders who continue the practice of filing unlawful criminal complaints for these civil matters. “One lender claimed that his company acted ‘based on an erroneous belief’ that it is a crime to issue a check that is dishonored,” said Giddings. “This bill clarifies that these borrowers have not committed a crime and that, in fact, it would be a crime to continue in this practice.”
Representative Helen Giddings (District 109) serves the cities of Dallas, DeSoto, Cedar Hill, Glenn Heights Hutchins, Lancaster, Wilmer as well as part of Duncanville.