Texas Appleseed Receives $240,500 Cy Pres Award

AUSTIN, Texas — Rusty Hardin & Associates designated Texas Appleseed as the recipient of a $240,500 cy pres award that stemmed from a class action lawsuit they filed to challenge predatory practices by a payday lender. Cy pres awards are residual funds from a lawsuit that cannot, for varying reasons, be distributed to all intended parties.

In 2014, Texas Appleseed uncovered the unlawful filing of criminal complaints by payday loan businesses to collect consumer debts. Threatening or pursuing criminal prosecution to collect a debt violates fair debt collection practices and is a violation of the Texas Constitution Bill of Rights. Texas Appleseed's research, which included public information requests to 21 counties and four justice courts, exposed more than 1,500 criminal bad check and theft-by-check complaints filed by payday loan businesses in Texas.

“Defaulting on a loan is not a criminal act, yet these borrowers faced threats of criminal prosecution, arrest warrants, and excessive fines,” Ann Baddour, Director of Fair Financial Services for Texas Appleseed said. “Some even served jail time as a result of these unlawful criminal complaints.”

Texas Appleseed submitted a regulatory complaint to the Consumer Financial Protection Bureau, Office of the Texas Attorney General, Federal Trade Commission, and Texas Office of Consumer Credit Commissioner, urging them to take action.

In 2015, Daniel Dutko with Rusty Hardin & Associates filed a lawsuit on behalf of their clients who faced wrongful criminal complaints submitted by a payday loan business. Lucinda Vine, et. al. v. PLS Financial Services, Inc., et al. was settled out of court and the plaintiffs received financial compensation.

“Texas Appleseed was an integral partner in this case and in ensuring predatory lenders are held accountable,” Mr. Dutko said. “Some money remained after the plaintiffs were compensated, and we had to determine how to allocate it. Considering the scope and impact of Texas Appleseed’s work, they were the clear choice to receive this cy pres award.”

Texas Appleseed remains tireless in our efforts to rein in payday and auto title lending abuses. These efforts include expanding market-based fair loan options, expanding good products in the market, making strides in regulatory reform, and educating individuals and policymakers about the many pitfalls in the current market.

Texas Appleseed is so thankful to Daniel and Rusty Hardin & Associates for their leadership and for supporting our nonprofit.

About Texas Appleseed
As one of the most trusted resources for data-driven policy analysis and solutions, Texas Appleseed advocates at the state and local level for fair, just, and equitable laws. Our work has shaped hundreds of laws and positively affected millions of Texans by breaking down barriers through transformative policy solutions. Visit www.TexasAppleseed.org for more information.

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