Whereas, harmful, high-cost loans have proliferated in California over the past decade extracting $1 billion dollars in interest fees out of financially vulnerable households each year leading families to significant family harm.
Whereas, there are no interest rate caps for loans of $2,500 and above leading lenders to promote easy approvals and quick availability of loans with annual interest rates of 132% to 224%, and a 42-month, $2,600 loan with a 134% interest rate, results in a total repayment of $12,695 and a 36-month, $2,501 loan with a 185% interest rate results in a total repayment of $13,996.
Whereas, the California Supreme Court issued an opinion in relation to a class action lawsuit against CashCall, a high-cost lender, the court called the loan terms “unconscionable” and held that an interest rate term in a loan contract can be “unreasonably and unexpectedly harsh,” “unduly oppressive,” or “so one-sided as to shock the conscience,” making such a loan unenforceable and uncollectably,” and legislative direction on allowable interest rates is necessary to curb the problem of over 350,000 loans originated each year with triple digit interest rates.
Therefore, be it resolved, that the San Diego County Democratic Party SUPPORTS AB-539 the “FAIR ACCESS TO CREDIT ACT OF 2019”
Be it further resolved, that support of this legislation is the official position of the San Diego County Democratic Party and that the party encourages Senator Ben Hueso from the 40th Senate District and member of the California Senate Banking and Financial Institutions Committee support this bill in committee and on the Senate Floor and for Senate President Pro Tempore Toni Atkins support this bill and ensure a vote.