For almost three months, CLUE staff and clergy have worked in support of a State bill that would cap the interest rate of high-dollar loans. Currently, there is no legal cap on most loan types, and about half of these loans have interest rates of over 100%, trapping vulnerable people in debt cycles that are so difficult to overcome.
Assembly Bill 784 would have capped these loans at a moderate interest rate and taken other measures to curb their predatory nature. It recently passed out of the banking committee and was heard at the Assembly Appropriations committee last Friday. Unfortunately, it did not pass out of appropriations.
This is not the end. We will continue to work for State legislation, keeping a close eye for similar bills to support, and we will also shift our focus to policy and local organizing efforts at the County level.
While AB 784 did not pass, here is what WAS accomplished…
- A rate cap passed the banking committee for the first time since payday lending was legalized here in 1997!
- We put this issue front and center for the Speaker and Appropriations’ Chair to consider. We hope to build off of that to get new chairmanship on the banking committees
- We killed the dollar financial bill (Gipson's AB1609)
- We killed another finder bill (SB297)
- We built up a huge and diverse coalition of civil rights, faith-based, and community organizations
- We know who our targets are for next time around, and who our friends are
- We made the industry spend a ton of money fighting this
- We have Assembly member Matt Dababneh on record supporting consumer protection and using the term “predatory lending”
- We have Assembly member Dababneh on record submitting an amendment that would have allowed lenders to continue business as usual
- This bill could have been killed by appropriations with no record of Dababneh’s amendment, but because of the close attention paid to the process, this was brought to light
CLUE leaders and coalition partners have a lot to be proud of, and we have a firm foundation from which to build. This will be an ongoing fight, as so many of these are. We will rejoice in the victories, and regroup with careful discernment after set-backs.
Thank you all for your continued partnership on this issue.