Today, the Center for Responsible Lending (CRL) filed a public comment on urgently needed rules proposed by the California Department of Business Oversight (DBO) that would require payday lenders to follow California law by prohibiting the use of electronic transfers and debit cards in payday transactions. The rules would also create a new real-time electronic database to enforce existing law requirements that borrowers take out only one loan at a time.
CRL Senior Policy and Enforcement Strategy Counsel Caryn Becker said:
The DBO's proposals will limit payday lender practices only to those activities actually authorized under the law and give DBO a real-time database that it needs to enforce existing provisions of California law: the 'one-loan-at-a time' requirement. While this would be a positive step, taking out even one loan at a time creates perilous debt traps for borrowers.