How Californians Are Working to #StopTheDebtTrap created by Payday and other High Cost Loans

Editor’s note: The CFPB, a federal agency, has proposed new rules for payday, car title, and high-cost installment lenders.


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.

PS: You do NOT have to be a payday, car title, or installment borrower to sign the petition.


Earlier this year, the Consumer Financial Protection Bureau announced  new federal rules under consideration for payday, car title and other high cost consumer installment loans.

Paulina Gonzalez, Executive Director of the California Reinvestment Coalition attended the CFPB’s field hearing in Richmond, Virginia, where the draft proposal was unveiled. Gonzalez testified on the consumer panel about the need for federal reforms.

Back in California, CRC members and our allies have been busy organizing to support rules with strong consumer protections that must require lenders to assess borrowers’ “ability to repay” before extending them a loan. If you are an organization that’s interested in getting involved, please contact CRC’s payday organizer, Liana Molina:

If you’re a consumer, please consider sharing your story with payday loans in our short survey.  Sharing your story can be an important way to help clean up this industry!

Some pictures from our work during the past few months are included below.

In October, community advocates sponsored and organized a Southern California Payday Reform Strategy Convening in Los Angeles to discuss the current state of payday lending, the proposed CFPB rules, and the impasse for consumer protection legislation in Sacramento. The picture below is Representative Maxine Waters, Ranking Member of the House Financial Services Committee along with Hernan Vera, who was president of Public Counsel at the time of the convening.

Payday Loan convening

In December, the Coalition Against Payday Predators, a coalition CRC belongs to, held a rally at a payday loan store in San Jose.  Representative Zoe Lofgren spoke at the rally, as did Dr. Emmett Carson, the founding CEO of the Silicon Valley Community Foundation.


Rep. Zoe Lofgren speakout against payday loans

In April, CRC partnered with CRL-California and California LULAC to organize the first ever California Consumer Leadership Academy.  Eight courageous women participated in this day-long training, shared their experiences, and crafted strategies on how to stop predatory lending practices in our communities.

California Consumer Leadership Academy

LA and Bay Area Trainings on CFPB proposed rules and filing complaints. In April and May, CRC organized two trainings, titled: “”Winning and Defending Strong CFPB Rules to End High-Cost Debt Traps” where we worked with local service providers to explain the CFPB proposal, the importance of it, and how to file CFPB complaints with or on behalf of the consumers they work with.

April Training in San Francisco at Mission Economic Development Agency

Stop The Debt Trap

May Training at the Community Center at Sol Y Luna Apartments, in partnership with the Center for Asset Building Opportunities and the East LA Community Corporation

Stop the Debt Trap LA

The picture below is of CRC, CRL-California and National Council of La Raza staff  at the NCLR Latino Policy Summit, where we presented on the status of payday lending in California and the current CFPB rule making process. CRC also presented at the Housing Rights Center Summit in Los Angeles and Housing California’s conference in Sacramento.

Stop the Debt Trap NCLR

Finally, CRC has been leading the charge in organizing our members and partners in outreach, education and advocacy work with members of Congress representing various congressional districts across the state. The CFPB will need strong political support to propose, enact and defend strong consumer protections.

Testimony Against OneWest and CIT Group Merger by Isela Gracian at ELACC

The testimony of Isela Gracian, Vice President of Operations for East LA Community Corporation (ELACC) about the proposed OneWest and CIT Group merger is featured in its entirety below. If you were unable to attend the hearing, CRC live-blogged it here and you may also find our CIT Group/OneWest Merger resource page helpful as well. Pictures are available here.


Good morning and thank you for hosting this hearing. My name is Isela Gracian and I am the Vice President of Operations for East LA Community Corporation (ELACC). ELACC is an economic and social justice organization serving the Eastside of Los Angeles for 20 years. We serve over 5,000 working class Latino families annually through our different programs and services. ELACC provides quality affordable housing to over 2,000 individuals in our affordable housing developments. Through our work we have leveraged over $124 million in investment for affordable housing and community assets to the Eastside of Los Angeles.

For decades the neighborhoods and residents we serve have lacked the needed investment to keep up with housing needs. In February of last year, the California Housing Partnership Corporation released a study highlighting how the housing market is failing to meet the need of low-income families in California.

In the Los Angeles County alone we have a deficit of nearly 400,000 homes for extremely low income renters; these are the most vulnerable residents in our neighborhoods. The families able to secure an affordable housing rental unit go from being rent burden with spending an average of 70% of their monthly income for rent to paying 30% of their income for rent. Affordable housing provides stability to families while enhancing the assets of neighborhoods.

While we believe that the large banks have failed to do their fair share of investment for affordable housing development, at least some have made efforts to improve access to capital and be partners is closing the affordable housing gap for low-income families. In these efforts one player has been absent, that player is OneWest. In their portfolio of products, OneWest does not have a multifamily loan product and CIT already has plans to phase out their Low Income Housing Tax Credit (LIHTC).

OneWest and CIT were saved by US taxpayer subsidies and they have failed to return the investment to the communities they are required to serve.

With so many families on the brink of homelessness because they are severely rent burdened we need every large bank reinvesting in the community.

Therefore, I urge the Federal Reserve to require that CIT and OneWest develop a comprehensive and public CRA plan with commitments proportionate to the size of the new bank and that it is informed by broad community input.

Thank you.