A visitor article from San Jose Council Member Ash Kalra on the behalf of Silicon Valley Community Foundation.
On January 1st, a huge selection of brand brand new rules went into effect in California, which range from enacting stricter weapon controls to legalizing driver licenses for undocumented immigrants. Unfortuitously, none of those laws that are new protect Ca customers through the high-cost, predatory payday lenders proliferating throughout our state. This is an area in which our state legislature has repeatedly failed to take action while 17 other states and the District of Columbia have implemented laws that restrict payday loans. Meanwhile, almost two million Californians had been saddled with cash advance debt in 2013.
Ca happens to be house to well over 2,000 pay day loan shops, the majority of that are situated in low or moderate-income communities and communities of color. While proponents declare that these loan providers provide crisis one-time credit for individuals struggling which will make ends satisfy, information collected by state and federal regulators illustrate that many cash advance borrowers become caught in a long-lasting period of high priced financial obligation due to their cash advance usage. For instance, customers with seven or maybe more loans each year produced 76 % of all of the cash advance costs. Whenever borrowers have stuck in the pay day loan debt trap, they wind up spending over 450 per cent in annualized interest during the period of many months and sometimes even years. Continue reading “Council Member Ash Kalra: Just How Local Leaders are Handling the Cash Advance Crisis”