Photo: Getty images

By: Brett Shipp, WFAA, 11/16/15

DALLAS — Two North Texas congressmen, both targets of a congressional ethics complaint, are defending their support of the controversial payday loan industry.

Republicans Jeb Hensarling and Pete Sessions of Dallas are accused of taking campaign contributions from payday lenders… closely followed by their votes to protect the industry from threatening legislation.

Representatives Hensarling and Sessions say they’ve done nothing wrong. But according to the ethics complaint, filed by the Campaign For Accountability of Washington D.C., what Hensarling and Sessions did amounts to accepting a bribe from an industry many accuse of taking advantage of the poor.

Inside a North Texas payday loan business last week, a borrower handed over hundreds of dollars to pay off a loan he had taken out in September. He now knows how lucky he is. Had a charity not given him they money to pay off the loan early, he likely would have never gotten out from under the obligation.

The borrower, who wants to remain anonymous, borrowed $440 from a payday loan company in Garland in September. A clerk scribbled a reminder on his receipt, indicating his payback would be $118.25 over five months.

But if he had read his contract (which he didn’t; most don’t), he would have noticed the monthly payment was only covering a separate $730 finance charge — not the principal and interest. The interest rate amounts to a whopping 358 percent, and borrowing $440 over six months would end up costing him at least $1,200.

“I was devastated. These were crooks,” said the Dallas resident, who works as a painter, after WFAA explained the terms of his loan. “I’m not rich; I’ve got one job that hardly pays me enough to eat.”

Sally Frank of Dallas got caught in the same financial trap from the same payday lender a few years ago.

“I had to take out two loans,” she said. “I was paying a 400 percent interest rate on this original loan I had taken out.”

Sky-high interest rates, onerous fees, and nightmare stories about payday loans are not new.

What is new, however, is a complaint filed with the Office of Congressional Ethics against 11 U. S. congressmen based on a report by the consumer watchdog group Allied Progress.

The report targets members of Congress for taking campaign contributions from the payday loan industry around the same time they sign up to sponsor legislation that — in part — would shield the industry from stiffer regulations.

“The brazenness at which they have taken this money, then turned around and done the bidding of these special interests, is unheard of,” said Karl Frisch, executive director of Allied Progress. “This needs to be investigated.”

According to the report, Hensarling accepted $85,750 in contributions and Sessions took in $38,280 over four years from people and political action committees affiliated with the payday loan industry.

Normally, campaign contributions from special interests are allowed, but the report cites examples where Hensarling and Sessions accepted contributions… then days later signed on to legislation supporting payday lenders.

For example: According to report, on July 14, 2014, Rep. Sessions took a $5,000 campaign contribution from pawn shop giant Cash America, which is based in Fort Worth. The next day, he signed up to co-sponsor of H.R. 4986, a bill that would have, in part, benefited payday lenders.

“It is well-settled that accepting a contribution to a political campaign can constitute a bribe if a quid pro quo can be demonstrated,” states the complaint, filed October 5.

After repeated attempts to schedule an interview with Sessions, WFAA caught up with him in Dallas last week. We asked him his opinion of the report, as well as the payday loan industry in general.

“You know this is a cheap shot,” Sessions said. “There are over 400 of these efforts [complaints] that are filed by left and right.”

He said the ethics complaint against him is baseless, and the accusations are political.

“This administration has done everything it can do to destroy business,” the lawmaker said.

Rep. Hensarling also declined our interview requests. “This so-called complaint was concocted by one liberal front group and marketed by another,” said Hensarling’s chief of staff, Andrew Duke, in a written statement. “The assertion being made by these groups is ridiculous and not worthy of further comment.”

Meanwhile, last month, in the sanctuary at Smith Chapel AME Church in inner-city Dallas, far from the world of Washington politics, payday loan “victims” and consumer advocates held a rally. It was a grassroots campaign to “Stop the Debt Trap.”

“I am a victim of predatory payday loans,” Gordon Martinez, a former payday loan customer, told those in attendance. “I’m speaking up because the demon in my life was payday loans.”

His was just one voice in a growing outcry to politicians to stop accepting money being siphoned from the poor, and to pass tougher laws to protect them.

Some cities are not waiting for Congress to act. Dallas, Houston, Austin and San Antonio have all recently passed regulations restricting payday loans. On Tuesday, the Arlington City Council is expected to do the same.