City joins growing national backlash against debt traps created by payday loans
Fresno- November 22- The Fresno City Council voted yesterday to move forward on the legislative process to enact an ordinance restricting new payday lenders in the city. If enacted, the ordinance would require lenders to obtain a conditional use permit and would create “buffer zones” of at least a quarter of a mile between payday lenders.
Fresno joins several other California cities in moving to restrict payday lending. Earlier this week, the Gilroy City Council voted to move forward on an ordinance, and in recent months, cities including Long Beach and Sunnyvale have adopted similar land-use and zoning ordinances to restrict payday lenders.
Yesterday’s vote adds to a national, growing momentum against payday loans. On Wednesday, the Consumer Financial Protection Bureau announced its first enforcement action against a payday lender, which includes $14 million in refunds to customers and a $5 million fine. Two bank regulators, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation, released new rules yesterday related to bank “direct deposit” loans that are similar to payday loans. The guidance from the regulators requires stronger consumer safeguards and means banks like Wells Fargo and US Bank will face strong scrutiny from regulators if they chose to continue making these loans.
Liana Molina, payday campaign organizer with the California Reinvestment Coalition, explained the importance of the vote: “The stories shared by faith leaders and payday loan consumers made it clear the status quo of making profits by offering predatory loans to low-income people is no longer acceptable. Fresno residents don’t want any more of these businesses or the financial heartaches they create for families.”
Faith in Community, a coalition of Fresno congregations, attended yesterday’s hearing, and supports restricting payday lending.
Consumer Financial Protection Bureau Takes Action Against Payday Lender: LINK
OCC and FDIC Release Guidance on Bank Payday Loans: LINK
The Consumer Financial Protection Bureau announced earlier this month that it will accept complaints about payday lenders. Consumers are encouraged to visit: http://www.consumerfinance.gov/complaint/
Are you a Californian who has used a payday loan and would like to share your story? Do you want to get involved in local efforts to restrict payday lending in our communities? If so, please contact Liana Molina, CRC’s Payday Campaign Organizer: Liana@calreinvest.org or 415-864-3980.
To stay up to date on financial justice issues in California, especially as they relate to low income communities, and communities of color, you can follow the California Reinvestment Coalition on our Facebook page, via Twitter, Google+, watch our movies on our YouTube Channel, sign up to receive our newsletter and action alerts, and of course, visit our website.