SAN FRANCISCO, June 1, 2018 – Last night, several members of the California Assembly succumbed to industry pressure and voted down AB 2500, the Safe Consumer Lending Act, a bill introduced by Assemblymember Ash Kalra (D-San Jose) to protect California families from abusive high-cost installment loans, including those made by car title lenders. The legislation would have substantially reduced the costs of consumer loans that are between $2,500 to $5,000. According to the California Department of Business Oversight, more than half of 2016 installment loans in this range had annual percentage rates of 100% or higher. AB 2500 is the only consumer protection bill introduced this legislative session that received support from more than 100 California consumer, faith, civil rights organizations, and cities. The bill was voted down 26 to 29, with 23 members abstaining.
Paulina Gonzalez, Executive Director of CRC, said, “This vote showed us the kind of iron grip the industry has over members of the California Assembly. AB 2500 was a reasonable approach to protect families from being abused by predatory lenders. The bill would level the playing field for responsible lenders that are providing access to safe and affordable loans. Members of the Assembly, especially many of those in the Latino Caucus, should be ashamed for making consumers less safe in the lending market. Assembly members should be representing constituents, not a predatory industry that marginalizes borrowers in low-income California communities. Predatory loans drive people into a cycle of debt, leads to damaged credit, closure of bank accounts, law suits, wage garnishment, and in many cases, bankruptcy. We commend Assemblymember Ash Kalra for continuing to be a champion for low-income families.”