California Payday Loan Bill takes a huge step back

California SB 515 would be huge step backwards for consumers and lenders alike. Here’s my opinion:

  • Making a payday loan 30 days makes no sense.  The borrower should be paying on their pay date.  If they do not, they risk not having the money to pay on another day.  By definition, “payday” loans should be paid back when the borrower gets paid by their employer.
  • Limit the borrower to six (6) loans makes sense for consumer groups, but does it make sense for the people that borrow?
  • Implementing a state database.  We deal with the database in many states and it just pisses off consumers.  States love it because they get to make a few nickels on every loan.
  • Making the law worse will eliminate lenders and create less competitions in the market place.

I liked this quote, btw:

“The best people to decide about their finances are the customers themselves,” said Greg Larsen, a spokesman for the California Financial Service Providers.

You can read the article titled “Bill would limit number of payday loans to any one borrower” in the LA Times.

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