California Payday LoansSacramento, California - Many officials from all over California have been calling for tougher laws concerning payday loans. This comes at a time when lawmakers are actually trying to increase the cap on payday loans from $300 to $500.

While many states and the U.S. military have banned payday lending and deemed it usury, California has seen an increase of 2 million loans issued compared to five years age. In 2006, the Department of Defense decided payday lending was “predatory” and a threat to troop morale and national security. As a result of that, Congress passed a law capping interest rates at 36 percent on payday loans made to U.S. military service members.

Insurance Commissioner Dave Jones, a former Assembly member, said “People are having to forgo food on the table or clothes on their backs or transportation in order to pay back these loans,” Jones was the one who introduced a bill in 2007 similar to those in other states that proposed a cap on interest rates at 36 percent because “the evidence was really compelling that the rules needed to be changed in California.” He also stated that payday lenders are “extraordinarily influential,” and Sacramento lobbyists persuaded Assembly leaders to shelve his bill.

Political contributions in California from payday lenders have  more than tripled in the last ten years.


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