Consumers in Texas would no longer be able to obtain credit through the use of their vehicle titles or other high-risk means if a bill filed by Rep. Tom Craddick this week passes through the Legislature.

The bill -- which along with a second bill filed Tuesday were among the first legislation presented by Craddick this session, according to the Texas Legislature online -- would look to restrict credit service agencies that offer quick cash loans by using a person's vehicle title, canceled check or authorization to debit accounts at a future date as a security against the debt they're taking on.

Craddick said since a case involving a car title loan was brought to light through a previous Reporter-Telegram article he's had several calls and visitors asking for legislation to restrict these lenders.

Some states, he said, work to curtail these loans through regulating interest rates, but he said after assessing the situation they believe restricting lenders in the type of collateral they can use will be most effective.

Loans obtained through car titles usually are offered at high interest rates of up to 40 percent and can catch many low-income citizens in a vicious cycle of debt, said Casa de Amigos financial literacy specialist Anita Green.

"I'd be happy to put them out of business completely," she said.

If passed, the bill would prevent credit service agencies from both obtaining and assisting in obtaining credit in a circumstance where these methods are used to back the loan.

Mireya Corrales, manager at Texas Car Title and Payday Loans, said if passed the law would probably prevent them from doing business in Texas. When people don't have good credit, she said, they'll use a car title to secure the loan and then take the car if the money is not repaid.

While a risky method of obtaining sometimes just a hundred dollars or two, in the current economy they keep busy. Corrales said they see 10 to 15 people each day looking for loans.

Several small loan companies that operate similarly to Texas Car Title and Payday Loans already are lobbying against the bill, Craddick said.

The bill, though, he said, probably wouldn't wipe out the cash advance loan industry from Texas since these businesses have several ways of offering loans. But hopefully, he said, it would restrict these loans for the sake of consumers.

Sometimes, Green said, that extra $100 being offered in exchange for turning over one's car title is just enough to meet a person's bills so she often sees clients who have taken on these types of loans. In the end, she said, they usually end up paying double or more what they were loaned to get their car title back.

Plus, she said, many people will get sucked into taking another loan when they get close to paying off the first loan, which keeps them in a constant cycle of debt.

"They fall into this trap and they do it over and over again," she said.

Midland County District Attorney Teresa Clingman said people usually take on the loans because they don't understand the potential consequences or they've simply run out of other options.

"I certainly think that regulation of those businesses is a good idea," she said.

Legislation is already in place nationally that prevents these types of loans from being made to active military personnel and their dependents, according to the Consumer Federation of America.

The bill would go into effect Sept. 1 if passed.

Craddick also filed a bill that would allow the board of an emergency service district to dissanex territory from the district and create a new district if approved by voters.

In Midland County, the emergency management division serves only Midland County and responds to other divisions to provide additional aid if needed, said Emergency Management coordinator Dale Little. The bill, Craddick said, was filed mostly in reference to a situation in Midkiff and Rankin that he hopes could be fixed with the passing of this piece of legislation.

To divide districts, according to the bill, a petition signed by 100 voters would have to be presented with a public hearing to follow. Then, should the board find the petition feasible, practical and beneficial to the public within 10 days, the bill would allow voters to decide the issue in the next election cycle.

If a new emergency service district were approved under the bill, residents in that new district could still be charged taxes to pay off debt in their old district.

These were the first bills posted by the Texas Legislature as filed by Craddick since the session began in January, though Craddick said there are several others that have been submitted and should be filed by the Legislature for public viewing in the coming weeks.