BUT, they need to hear from consumers- that means you! We have an easy-to-use page where you can weigh in- it only takes a minute and will help bring about important consumer protections with these loans. Please share a line or two in the comments box about why you care about this issue and want to see strong federal reforms.
The Denton Record-Chronicle reports (Corinth mulls rules on lending) that the city of Corinth, Texas may become the 8th city in Texas to limit payday and car title lenders.
As we wrote earlier (10 THINGS YOU MAY NOT KNOW ABOUT PAYDAY LOANS AND THE COMPANIES THAT MAKE THEM), cities in California, Texas, and Iowa are using local ordinances to restrict these lenders.
City leaders are citing a number of concerns with these lenders, including:
- The industry relies on its customers falling into the “payday loan debt trap” of taking out one payday loan, but then having to continually renew the loan, resulting in hundreds of dollars of fees going out of the pockets of people who can least afford it, and into the pockets of payday lenders and the Wall Street banks that provide money to payday lenders to operate. The CFPB found in it’s report on payday lenders that: “For payday borrowers, nearly half have more than 10 transactions a year, while 14 percent undertook 20 or more transactions annually. Payday borrowers are indebted a median of 55 percent (or 199 days) of the year. For the majority of payday borrowers, new loans are most frequently taken on the same day a previous loan is closed, or shortly thereafter.”
- Fringe lenders targeting low-income neighborhoods and neighborhoods where the majority of residents are people of color to open up shop.
- Businesses not “adding value” to communities, instead, sucking money out of the community.
Fringe lenders have tried to fight back to make their triple-digit loans. For example, the Signal Tribune reported earlier this month (“Judge denies auto-title lender’s petition over LB Council’s objection to moving into Wrigley“) that the City of Long Beach denied a permit to an out-of-state car title lender that was trying to open up shop. The lender, Pennbrooke Financial Services, LLC, sued, but a LA Superior Court Judge found that the City had appropriately denied the permit to the lender.
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.