The Senate Banking Committee’s approval of AB539 has made this a sad day for California borrowers. Many members of the committee acknowledged that rate caps will lead to great uncertainty and looming hardships for millions of borrowers if enacted. None of them were able to offer realistic solutions for how these non-prime borrowers would access badly needed credit if these rate caps took effect.
As the legislation moves forward, it is imperative that California’s elected officials fully consider the impact of this legislation on the consumers that will be impacted. It restricts access to safe and trustworthy credit products and forces consumers to take out loans saddled with costly ancillary products that obscure the true cost to the consumer.
If this legislation is enacted, lenders – including those who are publicly supporting and promoting this bill – will be forced to deny credit to those in need. California’s elected officials need to realize that this legislation will hurt consumers, plain and simple, like the ones who bravely told their stories at the hearing.