LA Times: Bill would limit number of payday loans to any one borrower

April 17, 2013

A bill before the California Legislature would restrict the number of payday loans to any one borrower — an attempt to break the "debt cycle" that ensnares some of the state's poorest residents.

Senate Bill 515 would bar the high-cost, short-term lenders from making more than six loans a year to any borrower. The bill, set to go before the Senate Banking and Financial Services Committee on Wednesday, also extends the minimum term of a payday loan to 30 days from 15.

"We need to recognize that these low-income families are desperate to get by, and they are particularly vulnerable to this type of debt trap," said state Sen. Hannah-Beth Jackson (D-Santa Barbara), who wrote the legislation.