Dolores Huerta Calls on California Legislature to Stop the Payday Loan Debt Cycle

Ahead of committee hearing, Dolores Huerta voices her support for Berman bill to protect Californians from payday loan debt cycle that drains Californians of hundreds of millions of dollars every year

• Isabelle Grassel
• Communications/Legislative Assistant
• (916) 319-2023
• [email protected]

Bill supporters released a new video today. Click here to watch.

SACRAMENTO, CA - At a time when many Californians are struggling with the rising prices of rent and groceries, labor leader and civil rights activist Dolores Huerta is calling on the California State Legislature to pass Assembly Bill 2558, to end the payday loan debt cycle and protect all Californians from this predatory practice.

Authored by Assemblymembers Marc Berman (D-Menlo Park) and Cecilia Aguiar-Curry (D-Winters), AB 2558 would cap interest rates on payday loans at 36% annual percentage rate (APR) - the same limit for lending to military servicemembers and rate caps in several other states.

"Too many Californians are struggling with a serious affordability crisis. The predatory payday loan industry is making this crisis worse by trapping Californians in a cycle of reborrowing, raking in huge profits off of their hard-earned wages that they need for rent, groceries, medical care, and other basic needs," said Assemblymember Berman. "I am honored to have the support of Dolores Huerta for AB 2558, which will protect Californians by capping the interest they can be charged for loans."

Payday lenders take more than $246 million from fees alone, and the majority of this revenue comes from Californians that have to take out subsequent loans. Current law requires that borrowers pay the loan back all at once from their very next paycheck, leaving far too many short on income and unable to meet other household needs. As a result, 47% of borrowers take out a new loan on the same day or within seven days of repaying the last one.

If passed, California would follow in the long-established history of the military and more than 20 other states that have passed legislation to stop this predatory business model that does not offer a real solution for individuals but rather traps them in a cycle of reborrowing.

The Dolores Huerta Foundation has joined Californians for Economic Justice, a growing coalition of over 40 advocates working with Assemblymember Berman and Assembly Majority Leader Aguiar-Curry to ensure California's credit market treats people fairly and promotes long-term financial stability for all families.

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Contact: [email protected]