More payday lenders than McDonald’s: Calls grow for regulations on California’s loan industry


HIGHWAY 101. ##### ASSEMBLYWOMAN MONIQUE LIMON
FROM GOLETA UNVEILED A NEW
BILL TODAY TO CAP INTEREST
RATES
ON PAYDAY LOANS. THEY’RE A QUICK FIX IF
YOU’RE SHORT ON CASH AND
NEED MONEY
BEFORE YOUR NEXT PAYCHECK. BUT AS KSBY’S DUSTIN KLEMANN
REPORTS, YOU COULD END UP
PAYING A HIGH PRICE FOR IT. THERE ARE NEARLY 1,300
MCDONALDS IN CALIFORNIA. AND MORE THAN 1,700 LICENSED
PAYDAY LENDERS THROUGHOUT
THE
GOLDEN STATE… A STUDY BY PEW CHARITABLE
TRUSTS SHOWED, 1 IN 20
CALIFORNIANS TAKE OUT A
PAYDAY LOAN EACH YEAR,
ADDING UP TO NEARLY 3
BILLION ANNUALLY. STANDUP: “IT DOESN’T TAKE
MUCH TO ACQUIRE A LOAN, YOU
DON’ NEED A CREDIT SCORE, JUST
PROVIDE YOUR INCOME AND A
CHECKING ACCOUNT AND YOU CAN
WALK OUT WITH MONEY.” SIU:
“PEOPLE ARE FALLING PREY TO
TAKEN OUT BY A REPEAT BORROWER, A
PRACTICE KNOWN AS LOAN
STACKING. SIU: “IF YOU AREN’T ABLE
TO REPAY THAT, YOU ENDING UP
TAKING
OUT ANOTHER LOAN AND
STACKING IT ON TOP OF THOSE
PREVIOUS ONES. JOURNALIST ANTOINETTE SIU
RESEARCHED THE PAYDAY LENDING
INDUSTRY FINDING THE
FINANCIAL
DANGER TO THOSE TAKING OUT
MULTIPLE PAYDAY ADVANCES AND
INSTALLMENT LOANS. SIU: “WITH THOSE HIG
TRIPLE-DIGIT INTEREST RATES
FROM 300 TO 400 PERCENT,
YOU’RE TAKING OUT $300,
$250, YOU END UP PAYING BACK
AROUND $1300 OR MORE.” LAST YEAR, SOME LAWMAKERS
INTRODUCED FIVE BILLS,
CALLING FOR ADDITIONAL
REGULATIONS ON THE PAYDAY
LENDING
INDUSTRY. BUT ALL OF THEM FAILED. TOM DRESSLAR SERVED AS A
DEPUTY COMMISSIONER
THE CALIFORNIA DEPARTMENT OF
BUSINESS OVERSIGHT. HE SAYS LOBBYING FROM THE
LENDING INDUSTRY LED TO
EACH BILL’S DEMISE. DRESSLAR BY PHONE: “OUR
PAYDAY LAW IS ONE OF THE
WEAKEST IN THE COUNTRY. IT’S
PAST TIME THE LEGISLATURE
STAND UP AND PROTECT
CONSUMERS. CALIFORNIA FINANCI
SERVICE PROVIDERS
ASSOCIATION SAYS THE
SERVICES OFFERED ARE VITAL
FOR CALIFORNIANS IN NEED OF
FUNDING THEY CAN’T FIND AT A BANK
ROGER: “IT’S IMPORTANT FOR
CALIFORNIA CONSUMERS TO
HAVE ACCESS TO CAPITAL EVEN
AT THE SMALLER DOLLAR LEVEL. MILLIONS OF CALIFORNIANS
CAN’T GET A LOAN FROM A BANK
OR A
CREDIT UNION BECAUSE THEY
DON’T HAVE A PRIME CREDIT
SCORE BECAUSE MANY BANKS DON’T MAKE LOANS BELOW
$10,000.”
ASSEMBLY BILL 539 WOULD
LIMIT
INTEREST RATES ON SMALL
DOLLAR LOANS TO 36 PERCENT. SALAZAR SAYS THAT CALIFORNIA
IS ALREADY REGULATED WEL
ENOUGH, BUT GOING TOO FAR
COULD CRUSH NEEDS OF
MILLIONS OF CONSUMERS. “IS THE INDUSTRY OPEN TO
SOME SORT OF REASONABLE
ARRANGEMENT? I THINK THEY
ARE,
BUT YOU JUST CAN’T LEGISLAT THEM OUT OF EXISTENCE.” IN
SAN LUIS OBISPO, I’M DUSTIN
KLEMANN, KSBY NEWS. THE NEW BILL INTRODUCED BY
ASSEMBLYWOMAN MONIQUE LIMON
ALSO PROVIDES REGULATORY
STABILITY FOR LENDERS TO
EXPAND AND OFFER SAFER
LOAN ALTERNATIVE

One comment on “More payday lenders than McDonald’s: Calls grow for regulations on California’s loan industry”

  1. Dick Manitoba says:

    Why not just collocate the payday lenders in each of the McDonalds?

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