CA Assembly Bill 784 – Flawed Law – Hurts Consumers

By Andrew Ysiano

On any given day, many Californians who don’t have enough saved to cover an unexpected expense of $500 face difficult decisions like: “how can I get my car fixed so I can make it to work?” All Californians should have the choice of getting a loan to pay for expenses.

For these unplanned financial emergencies, Californians currently turn to a legal, highly regulated online and storefront lenders who serve individuals who have been overlooked by big banks. These lending businesses are a necessary and vital lifeline for those with poor credit who are denied loans at more traditional financial institutions. Online and storefront lenders offer a myriad of services, including unsecured personal loans to those who desperately need cash.

Whether it’s paying overdue bills, covering an unexpected expense or avoiding an eviction notice, people rely on these loans to survive in California. If these options did not exist, people might not get the loans they need or may borrow from unlicensed lenders.

There is legislation (Assembly Bill 784 by Assemblymember Matt Dababneh) making its way through the California legislature that threatens marginalized middle-class and economically disadvantaged Latino and other minority communities who rely on the short-term lending to make ends meet.

Democratic lawmakers who are considering supporting this bill should keep in mind the millions of Californians who desperately need access to credit when ultimately voting on AB 784. If this bill passes and lending institutions are forced to shut down by superfluous restrictions and overregulation, these Californians will not be able to get access to the most basic credit options.

AB 784 is an unnecessary bill. California already has some of the strongest consumer protection laws in the country under the California Finance Lenders Law, which is governed by the California Department of Business Oversight. These laws mandate absolute transparency from the lender so the consumer is fully aware of what they are agreeing to. Attempting to enact additional legislation and regulation is not only redundant, but an egregious waste of government resources and will do nothing but hurt those who need help most.

To take action against this legislation, click here:


One thought on “CA Assembly Bill 784 – Flawed Law – Hurts Consumers

  • May 24, 2017 at 9:56 pm

    It’s strange this article doesn’t mention the APRs that these lenders charge, or that under current California law, lenders can charge as high of an APR as they want for loans that are greater than $2,500.

    According to data provided by the industry, in 2015, fifty percent of loans for amounts between $2,500 and $4,999 came with APRs of 100% or more.

    When these loans go bad (as so many of them do), it can ruin people’s credit scores, and for car title loans, can also mean they use their main way of getting to work. Talk about hurting, not helping the consumer!

    AB 784 is a good step forward in ensuring consumers still have access to credit while not being gouged by predatory lenders.


Leave a Reply

Your email address will not be published. Required fields are marked *