Sacramento Bee Weighs in on California’s Secure Choice Retirement Program Being Attacked

Last week, HJ Res. 66 moved forward, and several California representatives voted for it, including Rep. Kevin McCarthy, Rep. Devin Nunes and Rep. Ed Royce.

CRC is deeply disappointed to see this well-thought out program come under attack and will oppose any efforts to dismantle a program that helps people to save money for retirement.

Watch a Screening of “The Ordinance” with Stop the Debt Trap LA on Feb 22nd

Join Stop the Debt Trap LA on Wednesday, February 22nd from 2 – 4 pm for a screening of “The Ordinance” documentary film, followed by a short campaign briefing and planning meeting. the-ordinance

With billionaires, racists and Wall Street executives running the country, our communities are especially vulnerable.

Come learn more about how we’re organizing locally to shore up protections for consumers and communities against predatory lenders.

“The Ordinance” is a new short film focused on the fight to reform predatory lending in Texas, and the role that local communities, faith leaders and policy makers played in putting out the “not welcome” mat to financial predators in their community.

Much like in California, the Texas legislature is partial to the payday loan industry, and legally allows for abusive triple-digit interest rate lending. In Texas and in California, communities are fighting back and organizing to pass local policies in their cities to stop the growth of these industries and send a strong message to state and federal policy makers that enough is enough!

Come learn more about the local movement against predatory payday and car title lenders, and how you can get involved in our advocacy campaign!

Light refreshments will be provided.

Please RSVP either on CRC’s Facebook page, or by emailing Liana Molina.

If you have any questions or would like more information, contact Liana at liana@calreinvest.org

You can watch the trailer for the movie by clicking here.

Financial Re$ources for Immigrants and Low Income Families

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Low income families, especially immigrants, are the target of unprecedented federal actions that threaten their economic security in the short and long term.

Please join us on Wednesday, March 1, 2017  to learn how we can connect these families to real money and other resources, safely, to help them prepare for future emergencies or meet present needs, including:

  • Tax refunds like the federal Earned Income Tax Credit (EITC), California Earned Income Tax Credit (CalEITC), and Child Care Tax Credit,
  • Federal and state safety net benefits such as food stamps and cash assistance programs like CalWORKs, and
  • Banking tools to receive refunds and cash assistance safely and without expensive check cashing and overdraft fees.

Experts from the National Immigration Law Center, International Rescue Committee, and Bay Area Legal Aid, among others will answer your questions about the value of these resources, eligibility criteria for immigrants and others, and any changes we should expect from executive actions.

Join CRC members and allies, United Way affiliates, Volunteer Income Tax Assistance (VITA) providers, banks, social services agencies, and others to discuss how we can work together to help families secure critical resources safely.

Click here to register.

Time and Date: March 1, 2017, from 8:30 to 11:00 AM PST

Location: Alameda County Social Services Agency Eden Multi-Service Center

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New Payday Loan Facts in California

Did you hear that the Consumer Financial Protection Bureau is finalizing rules for high-cost payday, car title, and installment loans?

If you’re curious to know more about these loans, and the impact they have (mostly negative) on Californians and our state economy, then you’ll want to read CRC’s new fact sheet on payday lending in California.

It includes the latest data from the California Department of Business Oversight, as well as research on the negative drag to California’s economy created by payday loans.

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You can download the fact sheet by clicking here.

If you want to learn more about payday loans in California- and the work the California Reinvestment Coalition is doing to take on predatory lending, click here and visit the CRC website.

Celebrate Sacramento Reinvestment 2016

At our Celebrate Sacramento Reinvestment event held in September 2016, CRC awarded Raise the Wage Sacramento its Community Heroes of the Year award.

Raise the Wage Sacramento is a grassroots coalition of workers and community organizers, whose fight at the local level was instrumental to the Governor’s passage of the statewide $15 minimum wage this past April.

Building on the Fight for 15 campaign led by local fast food workers, the coalition’s success at mobilization and public actions created for elected leaders an undeniable mandate to raise the minimum wage. While our country grapples with a national solution to address growing income inequality, Raise the Wage Sacramento is inspiring evidence of true grassroots power and leadership in the struggle for working people in every state.

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CRC congratulates our honorees, and thanks our many sponsors for the event, whose sponsorship helps CRC to achieve our vision of an inclusive and fair economy that meets the needs of communities of color and low-income communities by ensuring that banks and other corporations invest and conduct business in our communities in a just and equitable manner.

California Lawmakers Call on CFPB for Stronger Payday Lending Rule

Payday Lenders

Have you heard?  After decades of abusive lending practices by payday, car title, and high-cost installment lenders, a federal agency, the Consumer Financial Protection Bureau (CFPB) will be releasing a new rule to better protect borrowers who use these loans.

The Center for Responsible Lending (CRL) and California Reinvestment Coalition (CRC) applauded California members of the U.S. Senate, U.S. House of Representatives, California State Legislature, city and county officials, and California Attorney General Kamala Harris who all sent official statements to the CFPB, calling on the bureau to strengthen an earlier, draft version of the rule.

In their letters, California lawmakers and attorney general highlighted that the proposed rule is a step in the right direction, but  that more needs to be done to ensure borrowers are not trapped in a cycle of debt by these predatory loans.

In California, payday lenders typically charge 366% APR on a $300, two-week loan.

Payday lenders and high cost lenders are also offering loans of $2,500 and above at 100% or higher  APRs. Consumers are especially vulnerable to this abusive practice as California does not have an interest rate cap for loans greater than $2,500.

“As elected representatives, we respectfully urge the Consumer Financial Protection Bureau to issue a strong federal payday lending rule that puts an end to the payday, car title, and high-cost installment loan debt trap nationwide” the legislators wrote.

“These high-cost unaffordable loans are detrimental to any community, but have a disproportionate impact on our African American and Latino neighborhoods. In California, payday lenders are twice as likely to be located in communities of color than in white communities, even after accounting for income. The core principle of CFPB’s proposal is the right approach—requiring lenders to ensure that a loan is affordable without having to re-borrow or default on other expenses. However, some of the details must be strengthened in order for this approach to truly work and protect Californians from predatory lenders.”

Payday lenders have invested in efforts to ward off state laws and federal regulations that would protect consumers. Some members of the California State Legislature, including California Assemblyman Ian Calderon (District-57) have pushed to weaken regulations against payday and car title lenders by calling on the CFPB to go light on rules that prevent abusive financial practices.

“This rule will create the first nationwide regulatory floor for the payday lending industry, while maintaining the prerogative of states to further strengthen their consumer protection laws and regulations as they see fit.” the attorney general wrote. “I strongly support the Bureau’s proposal to require a meaningful “ability-to-repay” standard and to curb collection abuses, as well as its proposals for structural protections to help protect consumers from being trapped in long-term, unaffordable debt.”

“Payday and car title lending significantly harm borrowers and their families. They lead to financial consequences, such as bank penalty fees, loss of cars, and bankruptcy. It’s discouraging to see that some members of the state legislature have aligned themselves with payday lenders instead of putting the interests of California families first.” explained Center for Responsible Lending Director of California Policy Graciela Aponte-Diaz. “We commend the members and the attorney general for their leadership and standing up against the payday lending industry.”

“For years, payday lenders have siphoned money out of the pockets of Californians who can least afford it,” said California Reinvestment Coalition Director of Community Engagement Liana Molina. “We applaud our state elected officials for standing up for responsible lending and we join them in urging the CFPB to finalize a rule that will protect borrowers.”

California state legislative members who signed the comment letter were:

Senators Bob Wieckowski, Mark Leno, Senator Fran Pavley, Hannah-Beth Jackson, Mike McGuire, Benjamin Allen, and Carol Liu; and Assembly Members Mark Stone, Patty Lopez, Philip Ting, Susan Talamantes Eggman, and Susan Bonilla.

The following local policymakers also called for a stronger payday lending rule:

Berkeley City Councilmember Jesse Arreguin, Menlo Park Mayor Rich Cline, Oakland Mayor Libby Schaff, San Jose Mayor Sam Liccardo, Roseville Mayor Carol Garcia, the Los Angeles County Board of Supervisors, San Mateo County Board of Supervisors President Warren Slocum, and Santa Clara County Supervisor Ken Yeager.

Additionally, U.S. Representative Maxine Waters led a group of more than 100 Congressional members in sending a comment letter to the CFPB Director calling for a stronger payday lending rule.

The California Congressional delegation members who signed the comment were: Peter Aguilar, Karen Bass, Xavier Becerra, Ami Bera, Judy Chu, Mark J. DeSaulnier, Anna G. Eshoo, Sam Farr, John Garamendi, Janice Hahn, Mike Honda, Jared Huffman, Barbara Lee, Ted W. Lieu, Zoe Lofgren, Alan Lowenthal, Lucille Roybal-Allard, Linda T. Sánchez, Jackie Speier, Mark Takano, Juan Vargas, and Maxine Waters.

Both U.S. Senators from California, Senators Dianne Feinstein and Barbara Boxer, have also signed on to a letter urging CFPB for a stronger rule.

CRL and CRC have consistently fought against abusive predatory lending practices across California. Recently, CRL and CRC sent comments to CFPB calling for the Bureau to end the payday lending debt trap and close off paths to evasion for predatory payday lenders. Read CRL’s letter here and CRC’s letter here.

As part of its rulemaking process, CFPB released its proposed rule on June 2, 2016, and has since received public comments from families, communities, and organizations. The final day for public comment was on October 7, 2016. The CFPB is expected to make its final decision on the regulations in 2017.

Los Angeles County Takes Stand Against Predatory Payday, Car Title, Installment Lending Practices, Urges Strong CFPB Rules

Editor’s note: If your organization would like to support strong consumer protections being included in the new CFPB rules for payday, car title, and high-cost installment loans, please contact Liana Molina (liana AT calreinvest.org) at CRC and she can help.  The deadline to give your feedback is approaching fast- it’s October 7, 2016!

On Thursday, September 8th, the Chair of the LA County Board of Supervisors, Hilda L. Solis, hosted a press conference with LA community leaders where she talked about the financial harms caused by predatory payday, car title, and high-cost installment loans.

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(Photo credits: Supervisor Solis' office, LULAC, Samuel Chu, and CRC)

LA County Motion

At the press conference, Supervisor Solis announced an LA County motion in support of the Consumer Financial Protection Bureau (CFPB) implementing strong federal rules to better protect consumers from harmful lending practices by payday, car title, and high cost installment lenders. The motion was approved unanimously the following week, making Los Angeles County the largest county in California (and the US) to pass a motion supporting strong rules by the CFPB to better protect consumers from predatory lending.

Supervisor Solis explained: “This motion is an important way for the Los Angeles County Board of Supervisors to demonstrate that we believe protecting families and their pocketbooks is good public policy and that we strongly support the CFPB finalizing a rule that will prioritize borrowers over ill-gotten profits.”

Community Leaders

Rabbi Joel Thal Simonds, associate program director at the Religious Action Center of Reform Judaism, opened the event. He explained: “The words of Exodus 22:24 remind us that ‘If you lend money to My people, to the poor among you, do not act toward them as a creditor; exact no interest from them.’ We seek a just and caring society in which those in need are not set on downward spiral of debt and hopelessness. That is why we must stop the abusive practice of payday lending which profits off the hardships of those living paycheck to paycheck. ”

Borrowers Discuss Their Experiences

During the press conference, former payday loan consumers also spoke about their experience with the so-called “payday loan debt trap.”  The “debt trap” refers to the fact that most payday loan borrowers are unable to repay their first loan when it comes due two weeks after they got it. So, they are forced to roll over or renew the loan, often multiple times, and they are paying an average APR in California of 366% when borrowing these loans.

Christina Griffin explained:

“When I had a financial emergency, I thought I could use a payday loan once and be done with it. Instead, I couldn’t pay back the loan two weeks later- and also be able to pay my other expenses. So, I had to keep rolling over my payday loan- which meant more and more fees and less money for other things- like groceries. As a former customer who survived the “debt trap,” I’m urging the CFPB to put a stop to this “debt trap” for future borrowers.”

Rosa Barragán shared her story of getting caught in a long term cycle of payday loan debt when she took out a loan following the passing of her husband.  You can read more of her story in La Opinión’s article about the press conference: Exigen mano dura para las compañías de ‘payday loans’.

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Rosa Barragan speaking

Pit of Despair Art Installation

In addition to the press conference, a visually stunning, life-sized 3D art installation, the “Pit of Despair” was unveiled.  It was created by an artist named Melanie Stimmel and the team at We Talk Chalk, and it is a graphic illustration of how payday lending really works. The interactive art display has traveled around the country to visually demonstrate the “debt trap” that the majority of payday loan borrowers find themselves in when they are unable to make a balloon payment to repay their loan two weeks after they receive it. As a result, most borrowers renew their loans repeatedly (incurring more charges each time), which has been labeled the “payday loan debt trap.”

Putting finishing touch on Pit of Despair- thanks Americans for Financial Reform!

Putting finishing touch on Pit of Despair- thanks to Americans for Financial Reform for sharing it!

The Negative Impact of Payday Loan Stores in Los Angeles
Los Angeles County is home to approximately 800 payday loan storefronts, by far the most of any county in California. Because of the structure and terms of payday, car title, and high-cost installment loans, they worsen the financial position of most borrowers. Research has found that lenders are disproportionately located in communities of color, and are a net drag on the overall economy.

Bill Allen, CEO of the Los Angeles County Economic Development Corporation, explained the impact  of payday loan fees recently in an LA Daily News OpEd:

“These “alternatives” drain low-income residents’ scant savings. More than $54 million in check-cashing fees and $88 million in payday loan fees each year are paid by county residents. If those consumers had better financial services options, much of that $142 million could go toward building household savings, thus increasing economic stability for their families and communities.”

Gabriella Landeros from the Los Angeles County Federation of Labor explained: “Working families deserve better than the harmful financial products peddled by these lenders, and we join the LA County Board of Supervisors in urging the CFPB to finalize and enforce a strong rule to protect consumers.”

Liana Molina, director of community engagement at the California Reinvestment Coalition, helped organize the event and coordinated with the StopTheDebtTrap team at Americans for Financial Reform to bring the “Pit of Despair” art installation.  She explained:

“The payday loan industry advertises their loans as quick, one-time “fix” for a financial emergencies. In reality, these loans are designed to do the opposite. The majority of borrowers will end up renewing their loans repeatedly and incurring huge fees every time they do so. The CFPB can stop this “debt trap cycle” by implementing a strong rule that would require lenders to underwrite these loans, to determine that borrowers have the ability to repay without having to re-borrow or default on other expenses.”

CRC extends a big thank you to the organizations that made the event possible:

East LA Community Corporation (ELACC),

LULAC – California,

New Economics for Women (NEW),

Mexican American Opportunity Foundation (MAOF),

Montebello Housing Development Corporation (MHDC),

Consumer Action,

Los Angeles County Federation of Labor, AFL-CIO,

Labor Community Services, AFL CIO,

Pacific Asian Consortium in Employment (PACE),

Asian Pacific Policy and Planning Council (A3PCON),

Multi-Cultural Real Estate Alliance for Urban Change,

Thai Community Development Center (Thai CDC),

Haven Neighborhood Services,

Korean Churches for Community Development (KCCD),

Koreatown Youth and Community Center (KYCC),

Public Counsel,

Religious Action Center for Reform Judaism, and

VEDC

Additional Background on the Impact of Payday Loans in California 

While fourteen states and the District of Columbia have interest rate caps of about 36% APR or less, California law allows for two-week, $300 payday loans at 459% APR interest.

The California Department of Business Oversight recently released two reports on payday lending, and car title and high cost installment loans.

A few stats are included below:

1) Total Number of payday loans: Approximately 12.3 million payday loans were made in California in 2015 and the aggregate dollar amount of the payday loans was about $4.2 billion.

2) Average number of loans and average APRs: The average number of payday loans per customer was 6.5, paying an average APR of 366% (a 5% increase from 2014).

3) Repeat borrowers and “churning” of loans: Contrary to loans being advertised as a “one time fix for emergencies,” 64% of fees in 2015 ($53.53 million) – came from customers who had seven or more payday loan transactions during the year.