SACRAMENTO — Assembly Bill 539, the Fair Access to Credit Act, is headed to the Senate after garnering bipartisan support in the Assembly. AB 539 places an interest rate ceiling of 36% plus the Federal Funds Rate on installment loans in the $2,500 to $10,000 range.
“AB 539 is an important consumer protection bill that is years overdue,” said Assemblymember Monique Limón (D-Santa Barbara). “I have worked hard to find a compromise that could earn support from both consumer groups and lenders alike, and AB 539 is the result of those negotiations.”
Efforts to provide stronger consumer protections in the small dollar loan industry have been in the works for over 14 years. The bad actors in the industry have fought hard to ensure that they can keep profiting off of the most vulnerable, but a broad and diverse coalition of responsible lenders, consumer advocacy and community groups, and local governments joined together to fight back, These efforts resulted in strong, bipartisan support from Assembly Members and Assembly Leadership.
“Opponents of this bill say it restricts access to credit for the people who need it most, but the only ones facing restricted access are unscrupulous lenders who want access to target vulnerable consumers. This is not a political issue, it is a moral issue – and today the Assembly took the moral stand,” said Assembly Speaker Anthony Rendon.
After so many years of failed attempts to address this problem, AB 539 is the Legislature’s best opportunity to prevent tens of thousands of consumers from falling into financial ruin due to high-cost loans. With the Assembly moving the fight forward, the Senate will now have a chance to carry on the torch.
— Monique Limón represents the 37th Assembly District which includes Santa Barbara, Ventura, Goleta, Carpinteria, Ojai, Santa Paula, Fillmore, Buellton, Solvang, Summerland, Isla Vista, Montecito and parts of Oxnard. She currently serves as Chair of the Assembly Banking and Finance Committee.