Please ensure Javascript is enabled for purposes of website accessibility

US Consumer Spending Falls as Trump Tariff’s Muddle Economy

5 hours ago

US Supreme Court Lets Parents Take Kids Out of Classes With LGBT Storybooks

6 hours ago

In Win for Trump, US Supreme Court Limits Judges’ Power to Block Birthright Citizenship Order

7 hours ago

California’s Newsom Sues Fox News for $787 Million for Defamation Over Trump Call

7 hours ago

Motorcycle Collides With Tractor in Fatal Fresno County Collision

7 hours ago

Fourth of July Celebrations Begin Saturday. Here’s Your Fresno Area Guide

10 hours ago

Bill Moyers, Broadcaster and LBJ’s White House Press Secretary, Dies at 91

1 day ago

State Department Approves $30 Million for Gaza Humanitarian Foundation

1 day ago

Cargo Ship That Caught Fire Carrying Electric Vehicles Sinks in the Pacific

1 day ago

4 Million Acres of California Forests Could Lose Protection. What Trump’s ‘Roadless Rule’ Repeal Could Do

2 days ago
California Might Finally Put a Lid on High-Interest Lenders
gvw_calmatters
By CalMatters
Published 6 years ago on
June 12, 2019

Share

The California Assembly has passed legislation to end a 34-year era during which non-bank lenders have been free to charge consumers unlimited interest rates on loans from $2,500 to $10,000.


Tom Dresslar
Special to CALmatters

By setting a 36% annual rate cap on such loans, Assembly Bill 539 by Assembly Banking and Finance Committee Chairwoman Monique Limón, a Democrat from Santa Barbara, would provide Californians with protections against high-cost loans similar to safeguards now enjoyed by an estimated 232 million Americans.
With the Assembly moving in a more pro-consumer direction over the past year, the most intriguing unknown surrounding AB 539 is its ultimate fate in the Senate.
In 2018, the upper house killed every bill passed by the Assembly to crack down on predatory lending.
Now, the Senate stands as industry’s best hope to preserve a system that harms vulnerable consumers’ financial well-being as it transfers wealth to high-cost lenders, and private equity and venture capital firms that own and fund them. AB 539 is set for a June 19 hearing in the Senate Banking and Finance Committee.
It’s important to understand the nature of AB 539’s opposition.
It includes industry trade groups that have for decades dictated the Legislature’s anti-consumer actions on lending issues – organizations such as the California Financial Service Providers Association and the Online Lenders Alliance.

Rolling Back Landmark Protections for Consumers

These outfits represent lenders who trap borrowers in unaffordable loans, but don’t care because they charge such exorbitant rates they reap their profits before consumers suffer the financial harm caused by non-payment.
The groups’ counterparts that focus on federal lobbying have built a mutually profitable relationship with President Donald Trump. The Community Financial Services Association of America puts money in Trump’s pockets by holding its annual conference at his golf resort in Doral, Florida.
The Trump administration returns the favor by rolling back landmark protections for consumers against predatory lending previously adopted by the U.S. Consumer Financial Protection Bureau.
Then, there are organizations which give the opposition the appearance of advocating for communities most harmed by predatory lending.
The California NAACP opposes AB 539. Its president, Alice Huffman, has parroted the industry’s scaremongering about reduced access to credit. That’s an odd stance, since the national NAACP’s governing board in 2016 ratified a resolution that blasted high-cost loans and predatory lending for “robbing households of hard-earned wages and savings” in African American and Latino communities.
The California Hispanic Chamber of Commerce also opposes AB 539 – hardly surprising, given the organization lists California Financial Service Providers as a corporate sponsor.
Then there’s the Habematolel Pomo of Upper Lake.
The Indian tribe runs an online lending operation comprised of four lenders and a lead generator. Sovereignty generally exempts the tribe from most state laws.

High-Cost Lenders Will Spare No Expense

But a 2016 California Supreme Court ruling subjects tribal lending operations to greater state regulatory scrutiny. The tribe opposes AB 539 unless it is amended to include sweeping exemption language that seems targeted, in part, at the court decision.

High-cost lenders will spare no expense, and hawk every variety of their snake oil, to maintain the predatory system that serves them so well. Hopefully, the Senate will not allow opponents to once again carry the day against the interests of California consumers.
For consumers’ sake, lawmakers should reject the amendment.
At a 2016 hearing of the Assembly Banking and Finance Committee, tribal Chairwoman Sherry Treppa said the tribe’s loans averaged $700 and had an average APR of 680%.
Such loans would violate California’s consumer lending law if the tribe’s operations were subject to the statute.
Like the trade groups, the tribe is allied with Trump in his administration’s assault on consumers. In the March 2017 edition of the tribal newsletter, “Arrow,” Treppa railed against what she called the CFPB’s “destructive and baseless rulemaking efforts surrounding short-term, small-dollar products.”
Less than a year later, in January 2018, Trump’s Consumer Financial Protection Bureau dropped an enforcement action alleging the tribe’s four lenders illegally tried to collect on triple-digit APR loans that were unlawful and void in at least 17 states. The complaint alleged that for an $800 loan, borrowers typically had to pay $3,320 over 10 months.
High-cost lenders will spare no expense, and hawk every variety of their snake oil, to maintain the predatory system that serves them so well. Hopefully, however, the Senate will not allow such a crowd of opponents to, once again, carry the day against the interests of California consumers.
About the Author
Tom Dresslar is a former reporter and retired deputy commissioner at the California Department of Business Oversight, which regulates financial service providers covered by AB 539, t.dresslar@comcast.net. He wrote this commentary for CALmatters, a public interest journalism venture committed to explaining how California’s Capitol works. Please read Dresslar’s past CALmatters commentary here.

DON'T MISS

What Are Fresno Real Estate Experts Predicting for 2025 and Beyond?

DON'T MISS

First California EV Mandates Hit Automakers This Year. Most Are Not Even Close

DON'T MISS

Trump Sends in DOGE to Slash Federal Gun Regulations by July 4

DON'T MISS

Tensions Flare at Announcement of Major Fresno County Gang Takedown

DON'T MISS

Measure C ‘Blackmailed’ As Fresno Enviro Coalition Gets Huge Say on Transportation Tax

DON'T MISS

Despite $49M Deficit, Fresno Unified Gives Top Brass 5% Raise, 3% One-Time Bonus

DON'T MISS

US Consumer Spending Falls as Trump Tariff’s Muddle Economy

DON'T MISS

US Supreme Court Preserves Key Element of Obamacare

DON'T MISS

US Supreme Court Lets Parents Take Kids Out of Classes With LGBT Storybooks

DON'T MISS

Fresno Unified Trustees Will Get Automatic Raises on Tuesday

DON'T MISS

Alleged ‘Fake’ ICE Agents Charged. Fresno Court Date Set

DON'T MISS

In Win for Trump, US Supreme Court Limits Judges’ Power to Block Birthright Citizenship Order

UP NEXT

Things Netanyahu Might Say if Injected With Truth Serum

UP NEXT

California Politicians Ignore Ag’s Troubles, but Boost Movie Business

UP NEXT

Trump’s Courageous and Correct Decision to Bomb Iran

UP NEXT

How the Attacks on Iran Are Part of a Much Bigger Global Struggle

UP NEXT

Groceries Are Now a Luxury. So Is Breathing.

UP NEXT

California Politicians Agree on School Money, but Poor Test Scores Need Attention

UP NEXT

Sen. Alex Padilla: This Is How an Administration Acts When It’s Afraid

UP NEXT

Bay Area Transit Systems Want More Money. But Their Payrolls Soared as Ridership Declined

UP NEXT

History Suggests the GOP Will Pay a Political Price for Its Immigration Tactics in California

UP NEXT

Only Nonviolence Will Beat Trump

Despite $49M Deficit, Fresno Unified Gives Top Brass 5% Raise, 3% One-Time Bonus

2 hours ago

US Consumer Spending Falls as Trump Tariff’s Muddle Economy

5 hours ago

US Supreme Court Preserves Key Element of Obamacare

6 hours ago

US Supreme Court Lets Parents Take Kids Out of Classes With LGBT Storybooks

6 hours ago

Fresno Unified Trustees Will Get Automatic Raises on Tuesday

7 hours ago

Alleged ‘Fake’ ICE Agents Charged. Fresno Court Date Set

7 hours ago

In Win for Trump, US Supreme Court Limits Judges’ Power to Block Birthright Citizenship Order

7 hours ago

California’s Newsom Sues Fox News for $787 Million for Defamation Over Trump Call

7 hours ago

Motorcycle Collides With Tractor in Fatal Fresno County Collision

7 hours ago

Ringo Is Ready to Rock Your World With ‘Pawsitive’ Vibes!

7 hours ago

Trump Sends in DOGE to Slash Federal Gun Regulations by July 4

WASHINGTON — The U.S. Department of Government Efficiency has sent staff to the agency that enforces federal gun laws with the goal of revis...

59 minutes ago

American Flag Revolver
59 minutes ago

Trump Sends in DOGE to Slash Federal Gun Regulations by July 4

Rob_Bonta_Speaking_At_Press_Conference_1280x720
2 hours ago

Tensions Flare at Announcement of Major Fresno County Gang Takedown

Garry_Bredefeld_Sandra_Celedon_Mesure_C_1280x720
2 hours ago

Measure C ‘Blackmailed’ As Fresno Enviro Coalition Gets Huge Say on Transportation Tax

Fresno_Unified_Raises_1280x720
2 hours ago

Despite $49M Deficit, Fresno Unified Gives Top Brass 5% Raise, 3% One-Time Bonus

Eastern Market in Washington, D.C.
5 hours ago

US Consumer Spending Falls as Trump Tariff’s Muddle Economy

Obamacare Sign in San Ysidro, California
6 hours ago

US Supreme Court Preserves Key Element of Obamacare

Pride Flags Fly in New York
6 hours ago

US Supreme Court Lets Parents Take Kids Out of Classes With LGBT Storybooks

7 hours ago

Fresno Unified Trustees Will Get Automatic Raises on Tuesday

Help continue the work that gets you the news that matters most.

Search

Send this to a friend