AB 1636 will boost transparency of payday lenders across state
OAKLAND, CALIF. – California Governor Jerry Brown has signed into law AB 1636, a bill introduced by Assemblymember Cecilia Aguiar-Curry (D-Winters) that aims to give the California Department of Business Oversight (DBO) the tools it needs to increase transparency of payday lenders. Under California law, payday lenders can charge rates as high as 460% annual percentage rate. The new law will strengthen DBO’s ability to regulate and review lenders’ business reports, including granting the agency authority to issue penalties on lenders that do not submit their reports by appropriate deadlines. Prior to the bill being signed into law, payday lenders were required to submit annual business reports and optional DBO survey without having to make them public.
Center for Responsible Lending’s California Policy Director Graciela Aponte-Diaz released the following statement:
Payday lenders' business model depends on trapping people in triple digit interest rate loans. These products have severe financial consequences on low-wealth families across California, including seniors who often live on fixed incomes such as social security or VA benefits. Payday lenders are also notorious for targeting communities of color, which widens the racial wealth gap and strips wealth opportunities for families. Predatory lenders thrive best when they’re in the dark, Assemblymember Aguiar-Curry’s bill will help shed light on an industry whose sole business model is meant to keep struggling people trapped in cycle of debt. We commend the Department of Business Oversight for the data reporting which they already provide, and commend Assemblywoman Aguiar-Curry and Governor Brown for creating greater transparency within the industry. We look forward to working with our state-elected officials in providing families relief from toxic products, including by pushing for a cap of 36% annually to truly stop the harms of these unaffordable loans in our communities.
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