SACRAMENTO — Assembly Bill 539: The Fair Access to Credit Act has made its way through the Senate Banking & Finance Committee with a 6-0 vote. This historic vote comes after years of failed attempts to protect California consumers from predatory lending practices.
“For 14 years, the California State Legislature has attempted to reign in predatory lending,” said Assemblymember Monique Limón (D-Santa Barbara). “Today, we have advanced a consumer protection bill in the Senate, but our fight is not over.”
AB 539 caps interest rates at 36% plus the Federal funds Rate of 2.4% on installment loans in the $2,500 to $10,000 range which average 100% to 225% interest rates. Consumers are often unable to repay these expensive loans, trapping already vulnerable Californians in a cycle of debt. AB 539 strikes a fair balance between consumer protections and access to credit that helps put an end to the debt trap millions of Americans are faced with each year.
“We have created a broad coalition of responsible lenders, faith leaders, consumer advocates, and bipartisan support in both Assembly and Senate that can attest to AB 539’s strength” said Assembly Limón.
“For too long predatory lenders have been allowed to profit off the devastation of California families in the name of ‘access to credit,’” said Assemblymember Grayson. “The truth is that triple digit loans aren’t really giving people access to credit but are instead giving debt collectors access to the most financially vulnerable. Today’s vote reaffirms that we have crafted the right compromise between protecting consumers and preserving real credit options for Californians.”
Ab 539 is now headed to the Senate Judiciary Committee.