BILL ANALYSIS Ó
SENATE JUDICIARY COMMITTEE
Senator Noreen Evans, Chair
2013-2014 Regular Session
SB 318 (Hill and Steinberg)
As Amended April 23, 2013
Hearing Date: April 30, 2013
Fiscal: Yes
Urgency: No
BCP
SUBJECT
Consumer Loans: Pilot Program for Increased Access to
Responsible Small Dollar Loans
DESCRIPTION
This bill would, until January 1, 2018, establish the Pilot
Program for Increased Access to Responsible Small Dollar Loans
(Program) for the purpose of allowing greater access for
responsible installment loans in principal amounts of at least
$300 and less than $2,500.
This bill would require licensees and other entities to file an
application and pay a specified fee to the Deputy Commissioner
of Business Oversight for the Division of
Corporations in order to participate in the Program. This bill
would authorize a licensee, who is approved by the Deputy
Commissioner to participate in the Program to impose specified
alternative interest rates and charges, including an
underwriting fee, an administrative fee, and delinquency fees,
on loans of at least $300 and less than $2,500, subject to
certain requirements.
BACKGROUND
On September 30, 2010, Governor Schwarzenegger signed SB 1146
(Florez, Chapter 640, Statutes of 2010) to create the Pilot
Program for Affordable Credit-Building Opportunities. That
program sought to increase the availability of credit-building
opportunities and to expand financial education for individuals,
particularly unbanked or under-banked persons. The Department
of Corporations (DOC) further notes:
(more)
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Lending under the pilot program is limited to unsecured
loans with a minimum principal of $250 and a minimum
repayment term of not less than 90 days, and no loan may be
$2,500 or more. Lenders are permitted to use the services
of "finders" in reaching prospective borrowers. The pilot
program is effective January 1, 2011, until January 1, 2015.
Finance lenders who are license[d] under the California
Finance Lenders Law and approved by the California
Corporations Commissioner to participate in the program may
charge specified alternative interest rates and charges,
including an administrative fee and delinquency fees, on
loans of at least $250 and less than $2,500, subject to
certain requirements. Licensees participating in the program
are also permitted to use the services of a "finder" as
defined in Section 22353(b) of the Financial Code. (Cal.
Dept. of Corp., About the Affordable Credit Building
Opportunities Program
[as of Apr. 26,
2013].)
The four-year pilot project began on January 1, 2011 and will
end on January 1, 2015. To allow the Legislature to evaluate
the effectiveness of the pilot, a report must be submitted by
the Commissioner of the Department of Corporations by January 1,
2014 that summarizes utilization of the pilot program and
includes recommendations regarding whether the program should be
continued after January 1, 2015.
This bill, based on conversations with the three SB 1146 pilot
program lenders about changes that could improve the pilot,
seeks to expand the number of lenders offering loans between
$300 and $2500 by, among other things, adding an underwriting
fee, increasing the origination fee, interest rates, late fees,
and the frequency of the underwriting and origination fee.
This bill was approved by the Senate Committee on Banking &
Financial Institutions by on April 17, 2013, by a vote of 9-0.
CHANGES TO EXISTING LAW
Existing law , the California Finance Lenders Law (CFLL),
administered by the Department of Corporations (DOC), authorizes
the licensure of finance lenders, who may make secured and
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unsecured consumer and commercial loans (Fin. Code Sec. 22000 et
seq.).
Existing law provides that CFLL licensees who make consumer
loans under $2,500 are capped at interest rates which range from
12 percent to 30 percent per year, depending on the unpaid
balance of the loan. (Fin. Code Secs. 22303, 22304.)
Administrative fees are capped at the lesser of 5 percent of the
principal amount of the loan or $50. (Fin. Code Sec. 22305.)
Existing law authorizes, until January 1, 2015, the Pilot
Program for Affordable Credit-Building Opportunities that allow
licensees accepted into the program to offer small-dollar
consumer loans under the CFLL that are subject to the following:
the loan has a minimum principal amount upon origination
of $250 and is not more than $2,500, as specified;
the interest rate does not exceed 30 percent for the unpaid
principal balance of the loan up to and including $1,000, and,
26 percent for the unpaid balance of the loan in excess of
$1,000;
an administrative fee not in excess of either five percent of
the principal amount, or $65, whichever is less;
the loan term is: (1) 90 days for loans whose principal
balance upon origination is less than $500; (2) 120 days for
loans whose principal balance upon origination is at least
$500, but less than $1,500; and (3) 180 days for loans whose
principal balance upon origination is at least $1,500;
the licensee must report each borrower's payment performance
to at least one of the national credit reporting agencies; and
the licensee must underwrite each loan and shall not make a
loan if it determines that the borrower's total monthly debt
service payments exceed 50 percent of the borrower's gross
monthly income. (Fin. Code Sec. 22348 et seq.)
Existing law imposes various other restrictions on participants
in the above pilot program, including the use of finders, and
requires the Commissioner of the Department of Corporations to
submit a report summarizing utilization of the pilot program,
including recommendations regarding whether the program should
be continued after January 1, 2015. (Fin. Code Sec. 22361.)
This bill would, until January 1, 2018, similarly establish the
pilot program for Increased Access to Responsible Small Dollar
Loans (Program) for the purpose of allowing greater access for
responsible installment loans in principal amounts of at least
$200 and less than $2,500. This bill would require loans made
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pursuant to the Program to meet the following requirements:
loans must have a minimum principal amount of $300 upon
origination and a term not less than: (1) 90 days for
loans whose principal balance is less than $500; (2) 120
days for loans whose principal balance is at least $500 but
less than $1,500; and (3) 180 days for loans whose
principal balance is at least $1,500;
licensees may charge the following interest rate: (1)
32.75 percent plus the United States prime lending rate on
that portion of the unpaid principal balance up to $1,000;
(2) 28.75 percent plus the United States prime lending rate
on that portion of the unpaid principal balance in excess
of $1,000, but less than $2,500;
an underwriting fee not to exceed $30, and an
administrative fee in an amount not to exceed six percent
of the principal amount, or $75, whichever is less. A
licensee may not charge an underwriting fee more than once
in any four-month period, and no administrative or
underwriting fee may be charged in connection with a
refinance unless more than eight months have elapsed, as
specified;
licensees may require reimbursement for the actual
insufficient fund fees incurred due to actions of the
borrower, and, may contract for and receive a delinquency
fee that is: (1) for a period of delinquency less than 4
days, $16; or (2) for a period not less than 14 days, $22.
No more than one delinquency fee may be imposed per
delinquent payment; no more than two delinquency fees may
be imposed during any period of 30 consecutive days;
prior to disbursement of loan proceeds, the licensee
must either offer a credit education program or seminar, as
specified, or invite the borrower to a credit education
program or seminary offered by an independent third party,
as specified; and
allow the loan to be rescinded by the end of the
business day following the date the loan is consummated.
This bill would prohibit a licensee or any of its subsidiaries
from attempting to collect a delinquent payment for a period of
at least 30 days following the start of the delinquency before
selling or assigning that unpaid debt to an independent party
for collection.
This bill would require a licensee to report each borrower's
payment performance to at least one consumer credit reporting
agency, upon acceptance as a data furnisher by that consumer
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reporting agency. A licensee that is accepted as a data
furnisher after admittance into the Program must report all
borrower payment performance since its inception of lending
under the Program, as specified.
This bill would proscribe the procedures by which an entity may
apply for the Program and permits the Deputy Commissioner of
Business Oversight for the Division of Corporations to approve a
licensee for the program before that licensee has been accepted
as a data furnisher by a consumer reporting agency, as
specified.
This bill would require a licensee to underwrite each loan and
state that the licensee shall not make the loan if it determines
that the borrower's total monthly debt service payments exceed
50 percent of the borrower's gross monthly income, as specified.
This bill would require the licensee to notify each borrower, at
least two days prior to each payment due date, informing the
borrower of the amount due, and the payment due date.
This bill would expressly prohibit: (1) any person, in
connection with the making of a loan, from offering, selling, or
requiring "credit insurance;" (2) a licensee from requiring, as
a condition of the loan, that the borrower waive any right,
penalty, remedy, forum or procedure provided for in any law
applicable to the loan, as specified; and (3) a licensee from
refusing to do business with, or discriminating against a
borrower or applicant on the basis that the person refuses to
waive any right, penalty, remedy, forum, or procedure.
This bill would expressly allow a licensee to use the services
of one or more finders, as specified. Those finders may perform
one or more of the following services for a licensee at the
finder's physical location for business: (1) distributing
written materials; (2) providing written factual information
about the loan; (3) notifying a prospective borrower of the
information needed to complete an application; (4) entering
information from a prospective borrower into a database; (5)
assembling credit applications and other materials; (6)
contacting the licensee to determine the status of loan
application; (7) communicating a response regarding
underwriting; and (8) obtaining the borrower's signature on
documents.
This bill would prohibit a finder from engaging in the
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following: (1) providing counseling advice; (2) providing
unapproved loan-related marketing material; and (3) interpreting
or explaining marketing materials.
This bill would also specify activities that qualify a person as
a broker rather than a finder, and require a finder to comply
with all laws applicable to the licensee that impose
requirements on the licensee for information security
safeguards.
This bill would also require a finder to provide a specified
statutory disclosure upon receiving or processing an application
for a Program loan and allow a finder to be compensated, as
specified, by the licensee pursuant to a written agreement.
This bill would prohibit a licensee from directly or indirectly
passing on any portion of the finder's fee to a borrower.
This bill would further require a licensee to notify the Deputy
Commissioner within 15 days of entering into a contract with a
finder, as specified, pay an annual finder registration fee, and
submit an annual report to the Deputy Commissioner regarding the
finder, as specified. This bill would require all arrangements
between a licensee and a finder to be set forth in a written
agreement between the parties.
This bill would allow the Deputy Commissioner to examine the
operations of each licensee and finder to ensure compliance, and
permit the Deputy Commissioner to take specified actions against
a finder upon a determination that a finder has acted in
violation.
This bill would require the Deputy Commissioner to examine each
licensee at least once every 24 months and provide that the cost
of the examination shall be paid to the deputy commissioner by
the licensee examined.
This bill would, on or before January 1, 2016, and again, on or
before January 1, 2017, require the Deputy Commissioner to post
a report on his or her Internet Web site summarizing utilization
of the Program, as specified. That report shall include, among
other things, the results of a random survey of borrowers who
have participated in the Program.
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COMMENT
1. Stated need for the bill
According to the author:
In 2010, SB 1146 was enacted to authorize a pilot program
intended to increase the availability of responsible small
dollar loans made in California. Since that legislation was
enacted, five lenders have applied to participate in the SB
1146 pilot program. Three of the applicants were accepted,
including Progreso (accepted to the pilot program in April
2011; made 118,000 loans under the pilot during 2012),
LendUp (accepted to the pilot program in November 2012 and
not yet lending under the pilot), and FairLoan Financial
(accepted to the pilot program in November 2012; has made
under 100 loans under the pilot program since acceptance).
Two of the applicants to the pilot program withdrew their
applications.
Despite the existence of the SB 1146 pilot, relatively few
installment loans are made in California, with principal
amounts under $2,500. This represents a challenge to the
significant population of people in California, who are
unable to access affordable credit through banks and credit
unions. Californians who lack credit scores or have very
thin credit files currently have very few options when they
need to borrow money. Credit cards are often unavailable to
this population, or, if available, bear very high interest
rates and fees. Californians with subprime credit scores
also have few options for affordable credit, and typically
access payday lenders or high-interest rate installment
lenders that lend in amounts above $2,500, when their
incomes fail to match their spending needs.
The author further states that this bill would establish a new
pilot program under the California Finance Lender's Law (CFLL)
and builds upon the experiences and knowledge gained through
establishment of the Pilot Program for Affordable Credit
Building Opportunities (SB 1146, Florez, Chapter 640, Statutes
of 2010).
Progreso Financiero, sponsor of SB 1146, further asserts that
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"after several years of experience in the Pilot it is clear
that more needs to be done to increase access to the program
for both lenders and borrowers. We need to make the benefits
of the Pilot more widespread, viable and useful to
Californians."
2. Building on SB 1146
This bill seeks to enact a new four-year pilot project that is
largely modeled upon the Pilot Program for Affordable
Credit-Building Opportunities enacted by SB 1146. That bill
sought to create an alternative to payday loans by establishing
a pilot program that would allow CFLL licensees to offer a new
type of small-dollar consumer loan that meets specified
requirements. SB 1146 was based upon the small-dollar loan
model of Progreso Financiero (Progreso), a company based in
Mountain View, California which offers short-term, unsecured
loans of $250 to $2,500 directed to Latino borrowers who lack
credit scores. As noted above by the author, Progreso was
accepted into the SB 1146 pilot and made 118,000 loans during
2012.
In response to feedback received from existing participants
(including Progreso), this bill would enact a four-year pilot
project that is substantially similar to the SB 1146 pilot, but,
also, increase the various fees that may be charged to consumers
who take out these loans. Regarding those fees, the Law
Foundation of Silicon Valley writes: "[W]e strongly support the
goal of expanding access to credit and creating affordable and
reasonably-priced alternatives for our community to payday
borrowing. It has been represented to us that the SB 1146
[pilot] established in 2010 has not created a profitable model
for such alternatives to flourish. As such, we are amenable to
a modification of the pilot that would add some increased
revenue; however, we are concerned that the proposed fee
structure would add excessive costs to borrowers and create a
riskier loan."
It should also be noted that this new pilot program is being
proposed just two years into the SB 1146 pilot - the Committee
should consider whether it is appropriate, on a fundamental
level, to create a new pilot program before the conclusion of
the SB 1146 pilot program.
a. Interest rate tied to prime lending rate
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Under the existing SB 1146 pilot program, a licensee may
charge a fee of two and a half percent a month on an unpaid
balance of a loan up to $1,000, and, two and one sixth a
percent per month on the balance between $1,001 and $2,500.
Those fees equate to an interest rate of 30 percent for the
amount up to $1,000, and, 26 percent for the amount above
$1,000. This bill would increase both of those interest rates
as follows: (1) on the unpaid principal balance up to $1,000,
an interest rate of 32.75 percent plus the United States prime
lending rate (prime); and (2) on the unpaid balance in excess
of $1,000, but less than $2,500, 28.75 percent plus prime.
The author, in support of the changes, asserts that the rates
reflect the high costs of capital, customer acquisition, and
loan origination that are experienced by non-depository
institutions. Center for Responsible Lending (CRL) expresses
concerns about the rate increases and states: "We heavily
negotiated these interest rates in SB 1146, which already
represent an increase from the non-pilot CFLL rates . . . We
believe the increases in the interest rates are larger than
would be necessary to generate sufficient additional revenues
for pilot lenders. We would limit the increase in rates, and
would also eliminate the tie to the prime rate, since rates
are at historic lows, rates will only move upward. Given the
4-year horizon of the pilot [program] and the likelihood that
interest rates will remain low for its duration, we see no
need to tie the pilot [program] interest rates to the prime
rate. We would suggest adjusting rates to 32 percent for the
first $1000 and 28 percent after." The author, in response to
that proposal, argues:
This component is critical for ensuring the success of
the SB 318 pilot. The nondepository lenders who make
pilot program loans experience an extremely high cost of
funds (in the range of 20 [percent] to 22 [percent],
depending on their size and history). We are currently
in an historically low-interest rate environment. As
interest rates rise, the lenders' cost of funds will
rise. If they are unable to increase the interest rates
on the loans they make, they will lose any possibility of
breaking even on those loans. The pilot program will
lose its existing participants and fail to attract new
ones. The change sought by [Consumers Union] and CRL is
simply non-negotiable. . . . The second component of this
amendment would reduce the proposed interest rate
structure in SB 318 from what is now 36 [percent] /32
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[percent] (based on the current prime rate), to 32
[percent] /28 [percent], fixed. The interest rates
proposed in SB 318 are based on pilot lenders'
experiences regarding the changes they need for the pilot
program to work; they are not arbitrary.
Staff notes that the prime rate is a commonly used short-term
interest rate and is often used in calculating changes to
adjustable rate mortgages. While the prime rate is currently
3.25 percent (thus, making the proposed interest rates 36
percent and 32 percent respectively), that rate was recently
as high as 8 percent between 2007 and 2008. If the fund rate
does increase, the permissible interest rate will rise above
36 percent (which is seen by some as the maximum fair rate).
It should also be noted that federal legislation was recently
introduced to cap interest rates and fees on all consumer
credit transactions at 36 percent. An April 9, 2013 article
in The Hill entitled "Senators seek to cap interest rates on
consumer loans" reports:
Senate Majority Whip Dick Durbin (D-Ill.) along with
several other lawmakers, introduced a bill on Tuesday
that would create an interest rate and fee cap of 36
percent for all consumer credit transactions, in an
effort to end rates that can skyrocket up to 300 percent.
. . . Efforts to tackle exorbitant interest rates have
failed in the past because of the difficulty in defining
predatory lending. In an effort to solve the problem,
the bill would apply the cap to all open-end and
closed-end consumer credit transactions, including
mortgages, car loans, credit cards, overdraft loans, car
title loans, refund anticipation loans and payday loans.
By setting a relatively high interest rate as the cap and
applying that cap to all credit transactions, the bill
overcomes the problem by putting all consumer
transactions on the same path. (Needham, Senators seek
to cap interest rates on consumer loans, The Hill,
[as of Apr. 26. 2013].)
Given the historical concerns about charging of interest rates
greater than 36 percent, and considering that this bill is a
four-year pilot program that must be reviewed by the
Legislature, the Committee should consider whether it is
appropriate to tie the interest rates to prime or, instead,
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cap the rates that may be charged. One possible alternative
to the approach suggested by CRL is to cap the proposed
interest rates at 36 percent. That compromise would
essentially give the proponents the benefit of the increased
rate (and continue to tie the rates to prime), but, ensure
that the rates do not surpass 36 percent.
SHOULD THE INTEREST RATES BE CAPPED AT 36 PERCENT?
b. Underwriting fee and administrative (origination) fee
This bill would additionally authorize an underwriting fee of
$30, and an administrative fee not to exceed six percent of
the principal amount, or $75. The author contends that the $30
underwriting fee reflects the high cost of stringent
underwriting, and the origination fee reflects the fact that
the cost to originate a loan is not driven by loan amount,
thus, the fee is increased to the maximum origination fee
authorized by the CFL for loans of $2,500 or above. In
comparison, the original pilot program allowed an
administrative fee of either five percent or $65, whichever is
less, and did not permit the charging of an underwriting fee.
Consumers Union (CU), in opposition, expresses concern that
the current provisions of SB 318 may impose too many fees on
consumers and result in riskier loans, but, appreciates the
intent of SB 318 and suggests, instead, that there be one
origination fee instead of an "administrative fee" and an
additional "underwriting fee." CRL similarly asserts that a
second administrative fee is excessive and unwarranted. In
response to those concerns, the author offers an amendment to
delete the underwriting fee and charge only one origination
fee, but only if the origination fee is set at seven percent
of principal amount, capped at $90. The author further
contends that "[t]his represents a significant cost concession
on our part. The SB 1146 origination cost structure fails to
come anywhere close to covering the cost to originate a pilot
program loan."
Staff notes that the author's proposed compromise would still
significantly increase the five percent fee (capped at $65)
that was allowed under the SB 1146 pilot. Accordingly, the
Committee should consider whether it is appropriate to raise
that fee (in addition to the interest rate increase described
above).
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SHOULD THE ADMINISTRATIVE FEE BE INCREASED?
It should also be noted that this bill would allow lenders to
charge borrowers an underwriting and origination fee in
connection with a new loan ever four months (SB 1146 permitted
that fee to be charged every six months). An underwriting and
origination fee could be charged once every eight months in
connection with a refinancing as opposed to every twelve
months under SB 1146. With respect to the refinancing
provision, CRL expresses concern about serial refinancing done
to generate fees while providing little or no benefit to
borrowers.
SHOULD THE FREQUENCY OF FEES BE INCREASED?
c. Late fees
This bill would allow a lender to receive a late fee of $16
after four days of delinquency, and, a fee of $22 after 14
days of delinquency. In comparison, the SB 1146 pilot program
allowed a late fee of $12 after seven days of delinquency,
and, a fee of $18 after 14 days of delinquency. Thus, the
proposed pilot program would both increase the amount of each
late fee by $4 and shorten the time period in which the fee is
assessed. The author asserts that these changes are based on
the finding that more stringent delinquency fees are highly
motivating to borrowers and that the proposed fees are
expected to reduce the number of delinquencies.
CRL asserts that the late fees in the existing pilot program
are sufficient and "were subject to significant negotiation
during SB 1146 deliberations . . . Late fees should be
reasonable and proportionate to the late payment that was
missed." CU, in opposition, similarly requests that the first
late fee permitted after only seven days of delinquency (not
four) because four calendar days is too little time for the
consumer to correct the problem - especially when it falls
over the weekend. CU further requests that only modest
increases be made to the amounts of late fees - no more than
10 percent. In response to those concerns, the author offers
an amendment to permit the first late fee after seven days
(consistent with the existing project), and, to allow a late
fee of $14 and $20, respectively. As with the above proposed
increases, the Committee should consider whether the proposed
increase in the amount of late fee is appropriate.
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ARE THE PROPOSED INCREASES IN THE LATE FEE APPROPRIATE?
d. Secured loans
SB 1146 specifically required loans to be unsecured
(essentially relying upon a borrower's promise to pay it back
as opposed to collateral), but, this bill does not include a
similar limitation. CRL notes that while this bill removes
the requirement for a loan to be unsecured, none of the
participating lenders indicate an interest or desire to add
secured loans to their existing programs and that "[s]ecured
loans are more risky for borrowers - especially when secured
by a car - but less risky for lenders." In response to those
concerns, the author offers an amendment to similarly limit
the proposed program project to "unsecured loans."
Author's amendment :
Permit only unsecured loans.
3. Remaining differences between this bill and SB 1146
The author notes that this bill would make the following changes
relative to the SB 1146 pilot program:
streamline the application process by allowing any
business in good standing with its regulator in California
to submit a joint application for licensure under the CFLL
and admittance to the pilot program;
delete the requirement that a licensee be approved as a
data furnisher by a consumer credit reporting agency before
being accepted into the pilot. The Commissioner of the
Department of Corporations would be authorized to approve a
licensee for the new pilot program, before that licensee
has been accepted as a data furnisher, if the Commissioner
has a reasonable expectation, based on information supplied
by the licensee, that: (1) the licensee will be accepted as
a data furnisher, once it achieves a lending volume
required of data furnishers of its type by a consumer
reporting agency, and (2) such lending volume will be
achieved within the first six months of the licensee
commencing lending under the pilot;
define consumer reporting agency;
increase the information provided to borrowers at
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origination;
clarify language regarding finders from the SB 1146
pilot program by providing that licensees who use finders
are responsible for identifying one or more employees of a
finder, who are in charge of finder activities across all
of that finder's locations, and clarify that the disclosure
notice required to be provided by lenders who utilize
finders, to borrowers may be provided as part of the loan
contract, or via any other means acceptable to the
borrower; and
require the DOC to publish two reports, rather than one,
regarding lender and borrower performance under the new
pilot program, and would alter some of the data elements of
the report to focus more on lender and borrower
performance.
Similarly, the following provisions of SB 318 are not contained
in the SB 1146 pilot program:
pilot program lenders must remind the borrower about
upcoming payments;
a licensee may appoint one or more branch managers;
provides that provision by a third party of an
electronic portal, which can be used by a prospective
borrower to "click through" to a pilot lender's Internet
Web site, does not, in and of itself, represent finder
activity; and
amend the CFLL to provide that the extension of a loan
subject to the CFLL by a person that is unlicensed under
the CFLL voids the loan contract, and would prohibit any
person from collecting or receiving any principal, charges,
or other recompense in connection with the loan.
4. Comparison with payday loans
The author and supporters assert that the pilot program created
by this bill will provide consumers with an alternative to
payday loans. Although the comparison with payday loans is
appropriate, it is not a strict apples-to-apples comparison for
two reasons.
First, the pilot program would permit a licensee to offer a
small-dollar loan of $300 to $2,500. Payday loans, on the other
hand, are capped at $300 for the face value of the check (minus
the $45 fee, leaving the borrower with $255). As a result, a
borrower who needs a $200 loan cannot access the pilot program
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and may then turn to a payday lender for assistance. On the
other hand, if the borrower could take out a more responsible
longer-term loan for $900 under the program, he or she is
arguably less likely to need to turn to a payday loan. Second,
payday loan borrowers must have bank accounts. The pilot
program, however, does not require that a prospective borrower
have a bank account and, in fact, contemplates that a number of
borrowers who are able to obtain loans under the pilot program
are unbanked, that is, they do not have bank accounts.
It should be noted that this bill would also contain two
critical elements that are not a part of the payday loan
product. First, this bill would require licensees to report
borrowers to a major credit bureau, thereby helping borrowers to
gain a credit history, unlike payday loans which are not
reported. Second, unlike payday loans, the bill would require
licensees to underwrite the loan and ensure that the loan is
affordable to the borrower.
Support : FairLoan Financial; LendUp; OpenCoin; Progreso
Financiero; Silicon Valley Leadership Group; Vallarta
Supermarkets
Opposition : Consumers Union
HISTORY
Source : Author
Related Pending Legislation : None Known
Prior Legislation : SB 1146 (Florez, Ch. 640, Stats. of 2010)
See Background.
Prior Vote : Senate Committee on Banking & Finance (Ayes 9, Noes
0)
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