A watchdog group targets payday lenders with a ‘2 strikes’ rule to help borrowers

Source
Scott Neuman | NPR
By law, the CFPB doesn’t have the authority to cap interest rates, but states do. According to the Center for Responsible Lending, 19 states and the District of Columbia have done so — usually imposing a limit of 36% APR. The federal Military Lending Act has long capped the annual interest charged on payday loans for military members and their...
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Payday and Other Small Dollar Loans

California looks to regulate 'earned wage access' apps

Source
Richard Allyn | ABC News
"People are paying quite a lot to use these apps," said Andrew Kushner, senior policy counsel for the Center for Responsible Lending, a consumer protection advocacy group that supports California's current move to regulate this growing industry. "It doesn't necessarily look like a lot at first glance." Currently, this industry operates in a grey area legally, with little federal oversight.
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Payday and Other Small Dollar Loans

California Should Not Delay Protections for Fintech Cash Advances

Earned Wage Advances Should Comply with State Interest Rate Limits Now, Not in Four Years SACRAMENTO – The California Department of Financial Protection and Innovation (DFPI) should restore cost limits for earned wage advances and other fintech cash advances under proposed regulations rather than allow a temporary registration regime with no cost limits for up to four years, the Center...
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Payday and Other Small Dollar Loans

Groups Urge DFPI to Prevent Consumer Harm in the Market for Income-Based Advances

Groups Urge DFPI to Prevent Consumer Harm in the Market for Income-Based Advances

The California Department of Financial Protection and Innovation (DFPI) should restore cost limits for earned wage advances and other fintech cash advances under proposed regulations rather than allow a temporary registration regime with no cost limits for up to four years, the Center for Responsible Lending, Consumer Federation of California, National Consumer Law Center, and Office of Kat Taylor said...
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Comment Letter
Payday and Other Small Dollar Loans

California Regulator Reports Rebound in Post-COVID Predatory Payday Lending

OAKLAND, CA - Payday lending activity increased significantly in California from 2021 to 2022, according to an annual report released by the California Department of Financial Protection and Innovation (DFPI) last month. The report tracks the activity of 109 lenders who voluntarily reported their lending. The number of payday loans surged by over 18.4 percent and the dollar value by...
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Payday and Other Small Dollar Loans

Consumer, Civil rights, and Labor Groups in California Commend Efforts to Regulate Abusive Fintech Lenders

Consumer, Civil rights, and Labor Groups in California Commend Efforts to Regulate Abusive Fintech Lenders

The undersigned organizations commend the Department of Financial Protection and Innovation (DFPI) for moving to regulate abusive fintech lenders, including earned wage advance providers. We are very pleased to support the proposed rules and encourage the DFPI to vigorously enforce them to ensure that California’s most vulnerable consumers are not harmed. Signatories California Employment Lawyers Association (CELA) CA Labor Federation...
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Comment Letter
Payday and Other Small Dollar Loans

Debt Under Duress: The Economic Impacts of Bail Bonds on San Francisco Bay Area Residents

Debt Under Duress: The Economic Impacts of Bail Bonds on San Francisco Bay Area Residents

Nearly 500,000 people are currently detained pretrial in jails around the United States, in part due to high bail amounts set by the judicial system that individuals cannot afford. That is a six-fold increase in the U. S. pretrial population from the 1970s, when it was closer to 83,000 people detained. Bail is money required in exchange for release from...
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Research
Debt Collection & Settlement

Comment on Proposed Rulemaking under the California Consumer Financial Protection Law: Earned Wage Access

Comment on Proposed Rulemaking under the California Consumer Financial Protection Law: Earned Wage Access

This set of comments will focus on earned wage access programs and other newer types of payday advance programs. NCLC and CRL have also joined a broader set of comments submitted by the California Economic Justice Coalition on a broader range of issues and a second set in conjunction with the Student Borrower Protection Center on income share agreements. These...
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Comment Letter
Consumer Finance

Group Comment to the Department of Financial Protection and Innovation on Income Share Agreements (ISAs)

Group Comment to the Department of Financial Protection and Innovation on Income Share Agreements (ISAs)

On September 25, 2020, Governor Newsom signed AB 1864 (Chapter 157, Statutes of 2020), establishing the California Consumer Financial Protection Law (“CCFPL”) under Division 24 of the Financial Code. The undersigned consumer advocates are encouraged to see that the Department of Financial Protection and Innovation (“DFPI” or the “Department”) is seeking input from stakeholders in developing regulations to implement the...
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Comment Letter
Consumer Finance