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.

Bay Area City Joins Movement Against Predatory Payday Lenders

Sunnyvale Passes Payday Lending Reforms

Sunnyvale, September 25, 2013— With a backdrop of state legislative inaction on payday reform and growing national visibility on the issue, the City Council of Sunnyvale voted last night to restrict the growth of payday lenders by enacting a “cap” on the number of lenders, creating “buffer zones” between lenders, allowing payday lending only in designated areas, and establishing operational standards. Most notable of the operational standards is that the city will require local payday lenders to provide information on “alternatives” available to consumers within the city and county that might be more appropriate than their high-cost, short-term loan product, which has garnered increasing criticism for creating cyclical debt for users.

Sunnyvale joins over a dozen other California cities that have enacted local controls to address or prevent the over proliferation of these and other fringe financial outlets. Just last week, the City of Long Beach adopted a similar policy, which strictly limits the development of any new payday lender, check casher or auto title lender. San Francisco, Oakland, Sacramento and San Jose have also adopted zoning limitations on high cost financial service entities in recent years.

Marie Bernard, Executive Director of Sunnyvale Community Services, one of the community leaders who attended the meeting voiced her support. She explains, “We’ve worked directly with people caught in the ‘payday loan debt trap,’ who have taken out multiple loans with high fees and interest rates up to 459%. By enacting this ordinance, the City of Sunnyvale makes a strong statement that we want to protect residents from predatory loan businesses.”

The ordinance creates a “cap” of six payday lenders in the city (there are currently eight in business, so if two leave, they can’t be replaced), requires a “buffer zone” of at least 1,000 feet between payday lenders, allows payday lending only in highway business commercial zones, and will create operational standards that new lending establishments will have to follow.

Liana Molina, the payday campaign organizer with the California Reinvestment Coalition, a member of the Coalition Against Payday Predators, (CAPP) applauded the council’s vote: “Tonight’s vote adds to the momentum of other California communities like Gilroy and Fresno that are considering similar ordinances to restrict payday and other fringe lenders. We hope officials in Sacramento heard tonight’s message loud and clear: local communities don’t want these businesses and the financial heartaches they create for our families.”

Kyra Kazantzis, Directing Attorney at the Law Foundation of Silicon Valley, also a member of CAPP, voiced her support: “Cities like Sunnyvale are taking courageous steps forward to restrict these modern day loan sharks. Looking forward, the California legislature should address the problem of payday lending at the state level.” (A state bill, SB 515, would limit the number of loans a person can receive annually, and would lengthen the amount of time borrowers have to pay back the loan.)

Additional Background: The Coalition Against Payday Predators (CAPP) is a coalition of 10 local organizations working to end payday lending in Santa Clara County. The coalition has received endorsements from over 40 local organizations and is funded by the Silicon Valley Community Foundation, which was recognized earlier this month by the National Center for Responsive Philanthropy for its payday lending work.

The San Jose Mercury News (8/27/12), the Sacramento Bee (9/16/13), and the New York Times (9/15/13) have published editorials against payday lending.

The Long Beach City Council voted 8-0 last week on an ordinance limiting payday lending in their city.

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:  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, watch our movies on ourYouTube Channelsign up to receive our newsletter and action alerts, and of course, visit our website.