September 8th- Los Angeles, CA—Today, the Chair of the Los Angeles County Board of Supervisors, Hilda L.
Solis, will join LA community leaders at a press conference to announce a Los Angeles County motion in
support of the Consumer Financial Protection Bureau (CFPB) implementing strong federal rules to address
predatory lending practices by payday, car title, and high cost installment lenders. If approved, Los Angeles
County would be the largest county in California to pass a motion supporting strong rules by the CFPB to better
protect consumers.
“This motion is an important way for the Los Angeles County Board of Supervisors to demonstrate that we
believe protecting families and their pocketbooks is good public policy and that we strongly support the CFPB
finalizing a rule that will prioritize borrowers over ill-gotten profits,” comments Supervisor Solis.
“When I had a financial emergency, I thought I could use a payday loan once and be done with it. Instead, I
couldn’t pay back the loan two weeks later- and also be able to pay my other expenses. So, I had to keep rolling
over my payday loan- which meant more and more fees and less money for other things- like groceries. As a
former customer who survived the “debt trap,” I’m urging the CFPB to put a stop to this “debt trap” for future

borrowers,” explains Christina Griffin, a former payday loan consumer.
Los Angeles is home to the highest number of payday lenders of any city in California. Because of the structure
and terms of payday, car title, and high-cost installment loans, they worsen the financial position of most
borrowers. Research has found that lenders are disproportionately located in communities of color, and are a net
drag on the overall economy.
“Working families deserve better than the harmful financial products peddled by these lenders, and we join the
LA County Board of Supervisors in urging the CFPB to finalize and enforce a strong rule to protect consumers”
adds Gabriella Landeros from the Los Angeles County Federation of Labor.
“The payday loan industry advertises their loans as quick, one-time emergency “fix” for a financial emergency.
In reality, these loans are designed to do the opposite. The majority of borrowers will end up renewing their
loans repeatedly and incurring huge fees every time they do so. The CFPB can stop this “debt trap cycle” by
implementing a strong rule that would require lenders to underwrite these loans, to determine that borrowers
have the ability to repay without having to re-borrow or default on other expenses,” explains Liana Molina,
director of community engagement at the California Reinvestment Coalition.
“The words of Exodus 22:24 remind us that ‘If you lend money to My people, to the poor among you, do not act
toward them as a creditor; exact no interest from them.’ We seek a just and caring society in which those in need
are not set on downward spiral of debt and hopelessness. That is why we must stop the abusive practice of
payday lending which profits off the hardships of those living paycheck to paycheck,” comments Rabbi Joel
Thal Simonds, associate program director at the Religious Action Center of Reform Judaism.
Pit of Despair Art Installation
In addition to the press conference, a visually stunning, life-sized 3D art installation, the “Pit of Despair” was
unveiled. The interactive art display has traveled around the country to visually demonstrate the “debt trap” that
the majority of payday loan borrowers find themselves in when they are unable to make a balloon payment to
repay their loan two weeks after they receive it. As a result, most borrowers renew their loans repeatedly
(incurring more charges each time), which has been labeled the “payday loan debt trap.”
Additional Background on the Impact of Payday Loans in California
While fourteen states and the District of Columbia have interest rate caps of about 36% APR or less, California
law allows for two-week, $300 payday loans at 459% APR interest.
The California Department of Business Oversight recently released two reports on payday lending, and car title
and high cost installment loans.
A few stats are included below:
1) Total Number of payday loans: Approximately 12.3 million payday loans were made in California in 2015
and the aggregate dollar amount of the payday loans was about $4.2 billion.
2) Average number of loans and average APRs: The average number of payday loans per customer was 6.5,
paying an average APR of 366% (a 5% increase from 2014).
3) Repeat borrowers and “churning” of loans: Contrary to loans being advertised as a “one time fix for
emergencies,” 64% of fees in 2015 ($53.53 million) – came from customers who had seven or more payday loan
transactions during the year.