On Monday we blogged about AB 377 (Mendoza), which will allow Californians to publish a individual check for as much as $500 to secure a quick payday loan, up somewhat through the current optimum of $300. A borrower who writes a $500 check to a payday lender would get a $425 loan вЂ“ which must be repaid in full in just two weeks or so вЂ“ and pay a $75 fee under this proposed change. ThatвЂ™s a significant payday for payday loan providers. But a lot more than that, a bigger loan size would probably b st the amount of Californians whom become perform payday-loan borrowers вЂ“ paying down one loan then straight away taking out fully another (and another) simply because they lack adequate earnings to both repay their loan that is initial and their fundamental cost of living for the following a couple of weeks.
The Senate Banking, Finance and Insurance Committee heard the bill on Wednesday, and things would not get well for the billвЂ™s opponents, whom included the middle for Responsible Lending and Consumers Union. The committee passed the balance for a bipartisan vote that is 7-1. The committee decided that allowing payday lenders to make much larger loans is sound public policy despite overwhelming evidence that payday loans trap many borrowers in long and expensive cycles of debt. (mais…)