The Online Lenders Alliance expressed strong opposition to AB 1109. This legislation seeks to impose an interest rate cap for consumer loans between $2,500 and $10,000, greatly limiting an important source of capital for non-prime consumers in California.
If enacted, AB 1109 will negatively affect consumers who are legitimately searching for fast and convenient credit, from obtaining those loans. There are millions of consumers who will not be approved for loans with an annual percentage rate (APR) of less than 36 percent. These consumers understand the risks and benefits of these products and have unique borrowing needs. By setting what amounts to an arbitrary price control many of these consumers will not be able to obtain the credit they are seeking, which is why OLA requested to oppose AB 1109.