On April 17 the California Senate Banking and Financial Institutions voted 5 to 3 to defeat SB 515, a payday lending reform bill.
"This is a stinging defeat for those who want our communities served by safe and responsible financial products. Despite offering compromise and the industry's own favored proposal of a larger loan amount, the Senate Banking Committee members voted to continue allowing the payday lending debt trap to wreak financial havoc on California's desperate borrowers and communities," said Paul Leonard, California Director of the Center for Responsible Lending (CRL). The bill was introduced by Senator Hannah Beth Jackson and its sponsors included CRL, the California Reinvestment Coalition, Law Foundation of Silicon Valley, and National Council of La Raza (NCLR).
SB 515 would have created a circuit-breaker for borrowers caught in the payday lending debt trap by establishing a 6-loan annual cap, and a real-time electronic database. If a borrower reached their sixth loan and could not afford to repay it in full, the bill would have mandated lenders to offer a monthly loan repayment plan. In addition, SB 515 would have extended the minimum term for each payday loan to 30 days.
The votes were as follows:
Votes for reform: Corbett (D- San Leandro), Beall (D- San Jose), Hill (D- San Mateo)
Votes against reform : Correa (D- Santa Ana), Berryhill (R- Stanislaus), Calderon (D-Montebello), Roth (D-Riverside), Walters (R- Laguna Niguel)
Abstentions (equivalent to a "no" vote): Hueso (D-San Diego)
For more information, contact Graciela Aponte in Calif. at 510.379.5518 or graciela.aponte@responsiblelending.org; Kathleen Day in DC at 202.349.1871 or kathleen.day@responsiblelending.org; or Ginna Green at 510.866.5989 or ginna.green@responsiblelending.org.