THERE WE GO WITH A SMILE THE ASSEMBLY BANKING AND FINANCE
COMMITTEE IS CALLED TO ORDER WE DO NOT HAVE A QUORUM BUT WE
CAN START AS A SUBCOMMITTEE SO WELCOME TO THE BANKING ASSEMBLY
BANKING AND FINANCE COMMITTEE WHETHER YOU ARE HERE IN PERSON
OR YOU'RE WATCHING VIRTUALLY OR ON THE PHONE LINES I AM
GRATEFUL THAT YOU HAVE JOINED US HERE IN ROOM FOUR THIRTY
SEVEN I WILL NOW GO OVER SOME KEY ELEMENTS OF THE STRUCTURE
OF TODAY'S HEARING AND TODAY WE WILL ALLOW TESTIMONY IN
PERSON AND ALLOW FOR ME TO USE BY PHONE FOR THOSE USING THE
MODERATED TELEPHONE SERVICE THE CALL IN NUMBER FOR THIS
HEARING IS EIGHT SEVEN SEVEN SIX NINE TWO EIGHT NINE FIVE
SEVEN AND THE ACCESS CODE IS ONE THREE ONE FIVE FOUR THREE
SEVEN YOU CAN ALSO FIND THIS NUMBER ON THE ASSEMBLY BANKING
COMMITTEE WEBSITE AS WELL AS ART AS WELL AS YOUR TV MONITOR
-- SCREEN WITH THAT OF THE OPERATOR ON THE LINE WILL GIVE
YOU INSTRUCTIONS ON HOW TO BE PLACED IN QUEUE BASED ON
WHETHER YOU SUPPORT OR OPPOSE A BILL IF YOU ARE CALLING IN
PLEASE ELIMINATE ALL BACKGROUND NOISE THIS INCLUDES MUTING
YOUR LIVE STREAM BROADCAST AND YOUR SMART DEVICES TO REDUCE
THE SOUND DISTORTION IF YOU ARE HAVING ANY PROBLEMS WITH
THE MODERATED PHONE SERVICE YOU CAN CALL THE COMMITTEE AT
NINE ONE SIX THREE ONE NINE TWO ZERO ONE FOUR AND MY STAFF
WILL BE THERE TO TRY AND HELP IN ANY WAY POSSIBLE I ALSO WANT
TO NOTE THAT WE ARE ACCEPTING WRITTEN TESTIMONY THROUGH
THE POSITION LETTER PORTAL ON THE COMMITTEE'S WEBSITE
AND THEN FINALLY IN ORDER TO FACILITATE THE GOAL OF HEARING
AS MUCH FROM THE PUBLIC WITHIN THE LIMITS OF OUR TIME WE
WILL NOT PERMIT CONDUCT THAT DISRUPTS DISTURBS OR OTHERWISE
IMPEDES THE ORDERLY CONDUCT OF LEGISLATIVE PROCEEDINGS WE
WILL NOT ACCEPT THIS TROUBLING BEHAVIOR OR BEHAVIOR THAT
INCITES OR THREATENS VIOLENCE EVEN UNVEILED THREATS WE APPLY
THESE RULES TO ALL PEOPLE WHO PARTICIPATE IN OUR PROCEEDINGS
THANK YOU FOR BEARING WITH US AS WE IMPLEMENT METHODS TO
CONTINUE TO SERVE THE PEOPLE OF CALIFORNIA WHILE ALSO BEING
MINDFUL AND RESPECTFUL OF THE PUBLIC HEALTH CONCERNS THAT
WE ALL FACE AND WITH THAT I AM LOOKING FOR A QUORUM WE
STILL DO NOT HAVE A QUORUM SO WE WILL CONTINUE TO PROCEED
AS A SUB COMMITTEE IT APPEARS THAT -- WITH -- WITH THAT WE
WILL START THE HEARING AS A SUB COMMITTEE -- THE ONLY BILL
THAT WE ARE HEARING TODAY IS AB TWENTY EIGHT THIRTY NINE
IT'S FILE ITEM ONE AND THIS BILL IS TESTIMONY ONLY AND
WE WILL NOT BE TAKING A VOTE TODAY ON THIS BILL BEFORE
WE BEGAN I DO WANT TO THANK THE AUTHOR FOR THE VALUABLE
DISCUSSIONS THAT WE HAVE HAD ABOUT THE ISSUE OF ACCESS IN
THE CONSUMER LENDING MARKET THIS IS THIS IS A CONTROVERSIAL
PROPOSAL AND I I KNOW THIS BUT BUT HE HAS APPROACHED IT WITH
THOUGHTFULNESS AND HE HAS ALSO APPROACHED WITH AN EFFORT TO
ENSURE THAT THE MOST VULNERABLE CALIFORNIANS HAVE ACCESS TO
SAFE LENDING PRODUCTS I AM GRATEFUL THE AUTHOR HAS AGREED
TO BRING THIS BILL BEFORE US SO THAT WE CAN ASK QUESTIONS
AND WE CAN ALSO PROVIDE OUR THOUGHTS ON HOW BEST TO PROTECT
CUSTOMERS AND HOW TO ENSURE THEY ARE ACCESSING SAFE AND
-- AND A REGULATED LENDING MARKET WITH THAT I WOULD
LIKE TO CALL FORWARD ASSEMBLY MEMBER VEHICLE DROP AND YOU
AND YOUR PRIMARY WITNESSES AND WHEN YOU ARE READY YOU MAY
BEGIN PERFECT THANK YOU SIR
OKAY GOOD AFTERNOON CHAIRED AND AND -- MEMBERS I WANT TO
THANK THE CHAIR AND THE MEMBERS FOR GIVING ME THE OPPORTUNITY
TO PRESENT THIS BILL AND HOPEFULLY WITH THE HELP OF OF
ALL OF YOU IN THIS ROOM WE CAN FIND A PATH FORWARD TO ENSURE
CALIFORNIANS WHO FOR NO FAULT OF THEIR OWN FIND YOURSELF
NOT BEING ABLE TO SECURE A LOAN THROUGH A BANK OR OTHER
TRADITIONAL CREDIT MARK MARKETS SOLUTIONS TO THIS PROBLEM ARE
NOT EASY -- AS YOU MENTIONED CHAIR BUT THESE LEGISLATORS
HAVE HAS THE RESPONSIBILITIES TO PROVIDE SAFE OPTIONS FOR
BORROWING MONEY WHEN THEY NEED IT AB TWENTY EIGHT THIRTY NINE
SEEKS TO INCREASE ACCESS TO CAPITAL TO HELP CALIFORNIANS
TO THE PIER IT'S A FINANCIAL -- THE STATE IS DESTABILIZING
THE STABILIZER IN EVENTS AND IN INCOME VOLLAND FULL VELOCITY
WHEN THEY CANNOT SECURE A LOAN THROUGH A BANK OR OTHER
TRADITIONAL CREDIT MARKETS AS AS HAS BEEN REPORTED CALIFORNIA
-- CONCERNED ABOUT INFLATION GAS PRICES HOUSING AND OTHER
COSTS THAT ARE INCREASING THEIR COSTS IN LIVING IN CALIFORNIA
ACCORDING TO THE P.
P.
I.
C.
OVER HALF OF ADULTS ARE CONCERNED ABOUT NOT HAVING
ENOUGH MONEY FOR RENT OR MORTGAGE PAYMENTS IN TIMES LIKE
THIS THE CONSUMER WILL WILL TURN TO ONLINE LOANS CHECKING
ACCOUNTS OVERDRAFTS -- AUTO TITLE LOANS UP PAWNSHOPS LOANS
FROM FRIENDS AND FAMILY -- IN PAIN THE BILL BILLS LATE
CALIFORNIA PILOT PROGRAMS FOR INCREASING ACCESS RESPONSIBLE
SMALL DOLLAR LOANS MISTREATED BY THE DEPARTMENT OF FINANCE
PROTECTION AND INNOVATION PROVIDES A SAFE REGULAR
RATE REGULATED MARKET FOR CALIFORNIA'S DEFINED SMALLER
DOLLAR LOANS UNFORTUNATELY WE CAN ALL AGREE THAT THE PILOT
PROGRAM IS -- DRASTICALLY UNDERPERFORMING ONLY ONE MAJOR
LENDER IS PARTICIPATING IN THE PROGRAM THERE WERE TWO BUT ONE
WENT BANKRUPT MORE THAN SIXTY PERCENT OF CALIFORNIANS WHO
APPLY FOR A LOAN UNDER THEIR CURRENT PROGRAM ARE DENIED
THESE FOLKS DON'T STOP LOOKING FOR MONEY THEY JUST GO TO THE
OFFSHORE OR OTHER LANDINGS WHO ARE NOT REGULATED BY THE STATE
OF CALIFORNIA AB TWENTY EIGHT THIRTY NINE IT'S NECESSARY
BECAUSE OF LACK OF LENDERS PARTICIPANTS PARTICIPATION
KILLING CALIFORNIA CALIFORNIANS -- PROVISION PILOT LENDING
PROGRAMS THE LEGISLATURE MUST GIVE CALIFORNIA'S SAFE OPTIONS
FOR BORROWING MONEY WHEN THEY NEED IT TO ADDRESS THIS AB
TWENTY EIGHT THIRTY NINE SEEKS TO INCREASE PILOT PROGRAM
PARTICIPATION DOING SO WILL INCREASE ACCESS TO SAY TO A
SAFE REGULATED BY AND SECURE FOR CALIFORNIANS JOINING ME
TODAY ARE DAN BUBBLE WILL NANTI AND JOHN MOFFETT REPRESENTING
CALIFORNIA FINANCIAL SERVICES PROVIDERS TO PROVIDE TESTIMONY
AND ANSWERED ANY QUESTIONS THE COMMITTEE MAY HAVE PLEASE
GO AHEAD THANK YOU SO MUCH MISTER CHAIR MEMBERS OF THE
COMMITTEE WE APPRECIATE YOUR TIME TODAY AND WE APPRECIATE
THE DISCUSSION AND GETTING GETTING YOUR IN THE COMMITTEES
FEEDBACK ON THE PROPOSAL THAT'S IN FRONT OF YOU -- YOU KNOW I
THINK THE COMMITTEE ANALYSIS DOES A NICE JOB SHOWING HOW
SMALL DOLLAR LENDING OVER THE LAST COUPLE YEARS HIS HAS
DECREASED SIGNIFICANTLY IN THE STATE THE REASONS WHY IN THOSE
ARE LEGITIMATE REASONS -- IF VARIOUS FORMS OF OF GOVERNMENT
ASSISTANCE TO CALIFORNIANS RENT MORATORIUMS ALL OF THOSE
THINGS HAD HAVE LED TO THAT DECLINE BUT AS THE AS THE
ANALYSIS ALSO POINTS OUT WE KNOW THAT FOR BETTER OR WORSE
A LOT OF THOSE PROGRAMS ARE COMING TO AN END AS AS THE
AUTHOR JUST NOTED -- WE'RE SEEING IN POLLING WE'RE SEEING
AND OTHER -- OTHER AVENUES CALIFORNIANS ARE BECOMING
INCREASINGLY CONCERNED ABOUT THEIR FINANCIAL WELL BEING HERE
IN THE STATE AND AND WHAT THAT LOOKS LIKE MOVING FORWARD OUR
VIEW IS THAT IT SHOULD BE THE PUBLIC POLICY OF THE STATE OF
CALIFORNIA TO PROVIDE A SAFE REGULATED PLACE FOR PEOPLE WHO
NEED MONEY CAN'T GO TO BANKS CAN'T GO TO CREDIT UNIONS TO
GET THOSE FUNDS AND AND WE WE THINK YOU KNOW ALTHOUGH THERE
IS THERE'S NO GOVERNMENT ENTITY OUT THERE THAT COLLECTS DATA ON
WHAT THE NEED IS WE THINK THERE ARE SOME INDICATORS OUT THERE
IN THE MARKET PLACE FOR EXAMPLE -- YOU KNOW YOU LOOK AT TWENTY
TWENTY PAYDAY LOANS HERE IN THE STATE OF CALIFORNIA SIX POINT
ONE MILLION PAYDAY LOANS AROUND ONE POINT SIX EIGHT BILLION
DOLLARS LENT AS THE COMMITTEE ANALYSIS POINTS OUT UNDER --
PRIOR TO THE PASSAGE OF AB FIVE THIRTY NINE LOANS FROM
THE TWENTY FIVE HUNDRED DOLLAR TO SEVENTY FIVE HUNDRED DOLLAR
SPACE BEFORE THE PASSAGE OF THAT BILL BE OF SEVEN HUNDRED
AND FORTY FIVE THOUSAND LOANS EVERY YEAR AROUND THREE BILLION
DOLLARS LENT THOSE LOANS ARE NOT NO LONGER AVAILABLE OUT IN
THE MARKET PLACE WHERE TO THOSE FOLKS GO THEY HAVE TO HAVE A
PLACE TO GO WE KNOW THEY'RE NOT GOING TO THE PILOT PROGRAM
DATA ON THE PILOT PROGRAM SHOWS THAT IN TWENTY TWENTY ONLY
NINETY FIVE THOUSAND LOANS WERE MADE THROUGH THE PILOT
PROGRAM THE BULK OF THOSE IN THE FIVE HUNDRED TO FIFTEEN
HUNDRED DOLLARS SPACE ONLY AROUND NINETY FOUR MILLION
DOLLARS LAND VIA THE PILOT PROGRAM WE THINK ONE OF THE
REASONS WHY THOSE NUMBERS ARE SO LOW IS BECAUSE AS AS THE
AUTHOR POINTED OUT YOU REALLY ONLY HAVE ONE MAJOR LEFT
ONE MAJOR LENDER LEFT IN THE PROGRAM THERE USED TO BE TWO
AND UNFORTUNATELY DURING THE PANDEMIC ONE OF THOSE ENTITIES
WENT BANKRUPT SO YOU'VE GOT ONE MAJOR LENDER LAUGHED YOU'VE
GOT SEVENTEEN SMALL LENDERS AND YOU'VE GOT SIXTY PERCENT OF
THE PEOPLE WHO APPLY FOR LOANS UNDER THAT PROGRAM ARE DENIED
A LOAN THESE FOLKS DON'T STOP LOOKING FOR MONEY THEY JUST
GO TO OTHER PLACES TO GET IT AND WE CAN ASSUME THAT A SMALL
PERCENTAGE OF THEM DO STOP LOOKING FOR MONEY BUT THE THE
VAST MAJORITY OF THEM DON'T THEY JUST GO TO OTHER PLACES TO
GET IT ONE OF THE REASONS WHY WE ARE IN FULL SUPPORT OF OF
THE AUTHORS BILL IS BECAUSE WE KNOW THAT CALIFORNIA'S PREVIOUS
PILOT PROGRAMS DIED BECAUSE OF LACK OF LENDERS FROM D.
F.
P.
EYES YOU KNOW TWENTY TWENTY REPORT ON THIS PILOT PROGRAM
THEY NOTED THAT IN TWENTY TEN THE AFFORDABLE CREDIT BUILDING
OPPORTUNITIES PILOT PROGRAM WAS IN EFFECT HELLO LENDER
PARTICIPATION RATE LED TO THE PROGRAM'S DEMISE LEADING TO A
TO BE REPLACED BY THIS PILOT PROGRAM IN TWENTY THIRTEEN
WE ARE ON THE PRECIPICE OF THAT AGAIN WE'VE GOT ONE
MAJOR LENDER LEFT AND SO HOW DO YOU GET MORE LENDERS INTO
THIS PROGRAM SO THAT MORE CALIFORNIANS KNOW ABOUT IT THE
AVAILABILITY OF THE PROGRAM AND CAN ACCESS THESE FUNDS
WHEN THEY NEED IT INSTEAD OF GOING TO AT A A.
N.
LENDING ENERGY OFFSHORE NOT REGULATED BY THE STATE OF
CALIFORNIA SO AB TWENTY EIGHT THIRTY NINE DOESN'T TOUCH
THE CONSUMER PROTECTIONS OF THE UNDERLYING PROGRAM IT
DOESN'T TOUCH THE SUNSET DATE OF THE PROGRAM IT HAS TWO
MAIN COMPONENTS TO IT AND THE FIRST IS REQUIRING D.
F.
P.
I.
TO POST ON THE INTERNET THE LIST OF OF FINANCIAL EDUCATION
PROVIDERS THAT A LENDER COULD UTILIZE WHICH HERE IN A SECOND
MISTER GWALTNEY IS GOING TO GET INTO WHY THAT'S IMPORTANT IN
HELPING KEEPING COSTS TO THE LENDER DOWN TO PARTICIPATE IN
THE PROGRAM SECONDLY IT ALLOWS THE INTRODUCTION NOT A MANDATE
BUT ALLOWS THE CHARGE OF A MONTHLY MAINTENANCE FEE FOR
THE SERVICING OF THAT LOAN IN HERE IN A SECOND MISTER BALL
HE'S GOING TO GET INTO THE DETAILS OF THAT TO RIGHT NOW
THE BILL SAYS FORTY DOLLARS PER MONTH POTENTIAL MONTHLY
MAINTENANCE FEE ON THE LOAN HOW DID WE GET THERE AS WE STARTED
LOOKING AT THIS PROGRAM WE STARTED LOOKING AT WHAT OTHER
STATES HAVE DONE HERE IN THE LAST COUPLE YEARS ON LOANS
IN THIS SPACE AGAIN THE THIS BILL DOESN'T TOUCH PAYDAY AND
IT DOESN'T TOUCH THOSE LOANS COVERED BY AB FIVE THIRTY NINE
WE'RE TALKING ABOUT A VERY SMALL SPACE BETWEEN THE FIVE
HUNDRED AND TWENTY FIVE HUNDRED DOLLAR SPACE AND WHEN WE LOOKED
AT OTHER STATES OHIO VIRGINIA HAWAII WE SAID OKAY ONE OF
THOSE STATES ALLOW IN THIS PROGRAM WHAT IT THEIR CONSUMER
PROTECTIONS ARE THERE LATE FEES ARE THERE ADMINISTRATIVE
FEES EVERY SINGLE ONE OF THOSE STATES ALLOWED A MONTHLY
MAINTENANCE FEE ON THE LOANS IN THE SPACE VARYING DEGREES
IS FORTY DOLLARS THE RIGHT NUMBER DON'T KNOW MIGHT BE
MIGHT NOT BE OTHER STATES TOOK TIERED APPROACHES DEPENDING
ON THE LOAN AMOUNT WE'RE CERTAINLY OPEN TO TALKING
ABOUT THOSE THINGS AND SO -- WITH THAT I'D LIKE TO I'D LIKE
TO CONCLUDE MY REMARKS AND TURN IT OVER TO MR CALLED ME
TO GET INTO SOME OF THE SOME OF THE ECONOMICS OF THE LOS
THANK YOU MISTER MOFFETT GOOD AFTERNOON CHAIRMAN GRAYSON I
WOULD LIKE TO THANK YOU FOR TAKING THE TIME TO ADDRESS
THIS ISSUE I'D LIKE TO THINK THE AUTHOR AS WELL MY NAME IS
DAN GWALTNEY ON VICE PRESIDENT OF THE CALIFORNIA FINANCIAL
SERVICE PROVIDERS AND I WANTED TO OFFER A PERSPECTIVE FROM
LICENSED CALIFORNIA LENDERS AND WHAT IT TAKES IN ORDER TO OFFER
LOANS TO THE CONSUMERS AND AS WE LOOK AT THE PILOT OVER THE
YEARS AND UNFORTUNATELY HAS BEEN POINTED OUT THE PILOT --
WELL INTENTIONED BEEN OUT THERE FOR ALMOST A YOU KNOW MORE
THAN A DECADE BUT UNFORTUNATELY IT'S NOT ATTRACTING ENOUGH
SUPPORT FROM DEAL LICENSE LENDING COMMUNITY AS WE KNOW
CONSUMERS ARE LOOKING FOR LOANS CALIFORNIA LICENSED
REGULATED LENDERS WOULD LIKE TO PROVIDE THAT THE MAJORITY
OF OUR MEMBERS OPERATE BOTH IN THE ONLINE BUT ALSO HAVE
A LARGE NETWORK OVER THOUSAND LOCATIONS THROUGHOUT THE STATE
OF CALIFORNIA UNFORTUNATELY AS WE SAW THE PILOT IS MISTER
MOFFETT POINTED OUT THE PILOT PROGRAM ONLY REALLY HAS ONE
PRIMARY LENDER THE SECOND LENDER WHO HAPPENED TO BE
KIND OF THE GRANDFATHER THE PILOT PROGRAM THE FOUNDING
FATHER THE PILOT PROGRAM THAT PARTICULAR COMPANY WHEN IT LEFT
THE SPACE DUE TO A BANKRUPTCY LEFT THE STATE SEVEN HUNDRED
AND TWENTY TWO LOCATIONS SHOT THAT THAT'S WHAT THEY HAD
PARTNERED UP THROUGH WHAT'S CALLED FINDING SO MEMBERS THAT
ARE NOW OUR MEMBERS THAT ARE LOOKING TO GET INTO THE SPACE
AND OFFER CUSTOMERS BETWEEN FIVE HUNDRED AND TWENTY FIVE
HUNDRED DOLLARS STALLMAN LOANS UP NEED TO BE ABLE TO COVER
THEIR COSTS AND UNFORTUNATELY WE SAW AND IT'S REPRESENTATIVE
WHEN YOU KNOW THE COMPANY WAS TRYING TO DO THAT NOT EVEN
THROUGH THERE ARE LOCATIONS BANKRUPT IT UNFORTUNATELY SHOWS
THAT THERE ARE EXPENSES THAT HAVE TO BE COVERED IN ORDER
TO OFFER THIS KIND OF CREDIT TO CONSUMERS THAT ARE GETTING
UNFORTUNATELY MAYBE GETTING IT OUT OF STATE WHERE THEY'RE
THEY'RE NOT AVAILING THEMSELVES OF LICENSED REGULATED AND
AUDITED CALIFORNIA COMPANIES SO SOME OF THE EXPENSES ASSOCIATED
WITH THE TWO PROPOSALS WITHIN -- THIS BILL IS THAT THE
FIRST ONE IT ALTHOUGH IT SEEMS SMALL IS HAVING THE DEPARTMENT
NOTATE ON THEIR WEBSITE WHAT IS THE AVAILABLE EDUCATION
PROGRAM THAT IS REQUIRED IS A CONSUMER PROTECTION UNDER
THE PILOT RIGHT NOW IF YOU'RE A LICE IF YOUR LENDER WHO
WANTS TO GET INVOLVED IN THIS YOU HAVE TO COULD YOU HAVE TO
FORMALLY GROUND TAKE IT TO THE REGULATOR AND THEN ASK THEM TO
BLESSED AS OPPOSED TO THAT'S ALREADY BEEN DONE SO WE WOULD
WE FIND IT REALLY HELPFUL AND IT REDUCES THE UP FRONT
-- BERRY TO ENTRY COSTS THAT LENDERS THAT WOULD LIKE TO GET
INVOLVED IN THIS PROGRAM THEY CAN JUST GO AHEAD THIS IS A
PROGRAM THAT'S ALREADY BEEN PRE APPROVED BY THE DEPARTMENT
YOU DON'T HAVE TO SPEND MONEY TO TRY TO FORMULATE A NEW ONCE
THE SECOND PROPOSAL -- ALLOWING A MODEST MONTHLY MAINTENANCE
FEE RECOGNIZES AND I REALLY APPRECIATE THE AUTHOR'S TIMES
LOOKING AT THIS THAT THEIR ONGOING EXPENSES THAT OCCUR
BEYOND THE INITIAL ADMIN FEE WHICH COVERS ORIGINATION
FUNDING EXPLAINING THE LOAN UP FRONT A LOT OF OUR CUSTOMERS
FOR A TYPE OF LENDING THAT WE'RE CURRENTLY DOING COME
INTO OUR LOCATION AND THEY WANT TO DEAL IN CASH THEY
WANT TO PAYING CASH THAT'S COSTLY YOU HAVE EMPLOYEES
THAT NEED TO MANAGE THAT CASH AND PROCESS IT IN ADDITION
THERE'S THERE'S INCREASE FOR CUSTOMER TRANSACTIONS THEY
WANT ANOTHER BALANCES THEY WANT TO DISCUSS SOME OF THE
TERMS AND WHAT HAPPENS IF I IGNORE CAN I REFINANCE THAT'S
ADDITIONAL LABOR COST IN ORDER TO DISCUSS THOSE WITH
CUSTOMERS UP RETRAINING OF EMPLOYEES THE PILOT PROGRAM
HAS SOME WONDERFUL CONSUMER PROTECTION BUT YOU HAVE TO
COMPLETE TURNOVER IN RETAIL AS YOU ALL KNOW GIVEN THE CURRENT
STAFFING SITUATIONS THAT A LOT OF RETAIL COMPANIES HAVE COMING
OUT OF THE PANDEMIC THOSE ARE ONGOING COSTS THAT OCCUR ON A
REGULAR BASIS SO MONTHLY YOU'RE MONITORING FOR COMPLIANCE IN
ADDITION YOUR REPORTING ON A MONTHLY BASIS CREDIT TO THE BIG
CREDIT BUREAU SO YOU CAN ASSIST THESE BORROWERS IN ESTABLISHING
BETTER CREDIT SCORES THERE'S COSTS ASSOCIATED WITH IT SO THE
AUTHOR HAS DONE A REALLY GREAT JOB AND RECOGNIZING THAT IN
ADDITION TO THE UP FRONT COST COVER YOUR UP FRONT ADDED THE
ADMIN FEE FOR UP CUT UP FRONT COSTS THERE ARE ONGOING AND
RISING AS I SAY RISING EXPENSES THAT WE'RE EXPERIENCING AS
CALIFORNIA BUSINESSES THAT WE HAVE TO COVER SO UNTIL THOSE
ARE RECOGNIZED YOU'RE NOT YOU'RE GONNA SEE THIS DEARTH OF
LANDING THIS CREDIT WASTELAND UNFORTUNATELY BETWEEN FIVE
HUNDRED AND TWENTY FIVE HUNDRED IT'S CONSUMERS RECOGNIZE THERE
ARE PEOPLE WILLING TO MEET THAT SUPPLY BUT UNFORTUNATELY
THE COMPANIES THAT ARE MEETING IT THEY'RE NOT SUBJECT TO
CALIFORNIA REGULATIONS THEIR OUT OF STATE THEY'RE NOT
EMPLOYING CALIFORNIANS THEY'RE NOT BEING TAXED AS CALIFORNIA
COMPANIES LIKE OUR MEMBERS ARE AND WE JUST THANK THE
AUTHOR AND THANK THE CHAIR FOR WILLING TO ADDRESS THIS
ISSUE AND WE'RE EXCITED TO ANSWER ANY QUESTIONS COMMITTEE
HOUSE TODAY THANK YOU FOR YOUR TESTIMONIES AND WE WILL NOW
GO TO PUBLIC THOSE THAT ARE IN THE ROOM IN SUPPORT IF YOU
WOULD LIKE TO COME FORWARD STATE YOUR NAME POSITION AND OR
NAME AFFILIATION AND POSITION THAT WOULD BE WONDERFUL AND WE
HAVE ONE GOOD AFTERNOON MISTER CHAIR AND MEMBERS ANGIE MINETTI
HERE IN SUPPORT OF THE BILL ON BEHALF OF POPULOUS FINANCIAL
THANK YOU VERY MUCH FOR THAT ANY OTHERS IN PERSON IN THE
ROOM THE WANT TO ADD ON YOUR SUPPORT SEEING NONE MODERATOR
WE WILL TURN TO YOU TO SEE IF THERE ARE ANY WITNESSES IN
SUPPORT ON THE PHONE SIMPLY NAME AFFILIATION AND POSITION
THANK YOU MISTER CHAIR AND LADIES AND GENTLEMEN IF YOU
WISH TO COMMENT IN SUPPORT OF AB TWENTY EIGHT THIRTY NINE
YOU MAY PRESS ONE AND THEN ZERO AT THIS TIME ONCE AGAIN
IF YOU WISH TO COMMENT SUPPORT OF AB TWENTY EIGHT THIRTY
NINE MAY PRESS ONE AND THEN ZERO NINE TEN YOUR LINE IS
OPEN PLEASE GO AHEAD THAT'S SHOWING MEMBERS RAINY KERRY
WITH AARON REVIEWED SO SET ON BEHALF OF COMMUNITY CHOICE
FINANCIAL WE LOOK FORWARD TO CONTINUING THE CONVERSATION
ON THIS ISSUE THANK YOU
WE HAVE NO FURTHER COMMENT IN SUPPORT OF AB TWENTY EIGHT TO
THIRTY NINE THANK YOU MODERATOR WE WILL NOW TURN TO WITNESSES
IN OPPOSITION IF WE HAVE PRIMARY WITNESSES IN OPPOSITION
YOU MAY APPROACH THE TABLE UP FRONT THE DÍAS AT THIS TIME
THANK YOU TO THE PRIMARY WITNESSES IN
SUPPORT FOR MAKING ROOM
AND PLEASE WHEN YOU ARE READY IF YOU DON'T MIND
SELF INTRODUCING THANK YOU HELLO RIGHT HI J.
GRAYSON AND MEMBERS OF THIS COMMITTEE THANK YOU FOR THE
OPPORTUNITY TO TESTIFY THIS AFTERNOON MY NAME IS LUCY A
MATIC'S WITH THE CENTER FOR RESPONSIBLE LENDING AND I'M
ALSO REPRESENTING A COALITION OF CONSUMER ADVOCATES NONPROFIT
AND FAITH LEADERS WHO HAVE COME TOGETHER IN STRONG
OPPOSITION TO AB TWENTY EIGHT THIRTY NINE ORGANIZATIONS
WORK TO ENSURE ALL CONSUMERS IN CALIFORNIA HAVE ACCESS TO
SAFE AND AFFORDABLE FINANCIAL PRODUCTS IN OUR LAWS REFLECT
THE HIGH STANDARDS AND CONSUMER PROTECTIONS WE HAVE WORKED
CLOSELY WITH THIS COMMITTEE IN THE PAST ELIMINATE PREDATORY
LENDING THAT TARGETS THE MOST ECONOMICALLY VULNERABLE
CONSUMERS WITH THAT WE ARE VERY CONCERNED WITH THE PROPOSED
CHANGES TO THE SMALL DOLLAR LOAN PILOT PROGRAM THIS BILL
WOULD UNDERMINE ALL THE WORK WE HAVE DONE TO KEEP LENDERS
FROM STRIPPING WEALTH FROM OUR COMMUNITIES THE PROPOSED
MONTHLY MAINTENANCE FEE OF FORTY DOLLARS ON LOANS FROM
FIVE HUNDRED DOLLARS TO TWENTY FIVE HUNDRED DOLLARS IS NOTHING
SHORT OF ABUSIVE THIS BILL WOULD ALLOW LENDERS TO CHARGE
THE EQUIVALENT OF TWO HUNDRED PERCENT APR ON A FIVE HUNDRED
DOLLAR LOAN AND SEVENTY ONE PERCENT APR ON A TWENTY FIVE
HUNDRED DOLLAR LOAN THE FBI DATA SHOW THAT THE MAJORITY
OF PILOT LOANS MADE ARE TO PEOPLE BUT MAKING BETWEEN
TWENTY THOUSAND TO FORTY FIVE THOUSAND DOLLARS A YEAR THESE
CONSUMERS IN PARTICULAR SHOULD NOT BE THOUGHT OF HIGH COST
DEBT WHEN SEEKING LOANS THAT ARE SUPPOSED TO BE BENEFICIAL
ALTERNATIVES TO PREDATORY LENDING CALIFORNIA MADE GREAT
STRIDES IN TWENTY NINETEEN WHEN THE LEGISLATURE PATH EIGHTY
FIVE THIRTY NINE THIS AT A RATE CAP ON INSTALLMENT LOANS WHICH
WE PROBABLY WORKED ALONGSIDE CHAIR GRAYSON AT THE BILL CO
AUTHOR TO PASS UNDER THIS LAW TWENTY FIVE HUNDRED DOLLAR
LOANS HAVEN'T APR CLOSER TO THIRTY SIX PERCENT ALMOST HALF
OF WHAT THIS NEW BILL PROPOSES THEREFORE AB TWENTY EIGHT
THIRTY NINE WOULD MOVE US IN THE WRONG DIRECTION AND PROVIDE
A LOOPHOLE FOR LENDERS TO TARGET AND PREY UPON CONSUMERS
I'VE COMMUNITIES HARDEST HIT BY THE CLUB IN NINETEEN
PANDEMIC OR TRYING TO RECOVER FROM RELATED ECONOMIC SETBACKS
WE SIMPLY CANNOT BLESSED ASTRONOMICAL INTEREST RATES TO
BE OFFERED THROUGH A PROGRAM THAT WAS NOT DESIGNED TO
INCREASE ACCESS TO CAPITAL FOR THESE REASONS WE STRONGLY URGE
THE COMMITTEE TO HOLD AB TWENTY THIRD TWENTY EIGHT THIRTY
NINE AS WELL AS ANY FUTURE ATTEMPTS TO UNDERMINE CONSUMER
FINANCIAL PROTECTIONS THANK YOU
THANK YOU GOOD AFTERNOON CHEN MEMBERS LISA LEWIS HERE ON
BEHALF OF EAST BAY COMMUNITY LAW CENTER AND CALIFORNIA'S
FOR ECONOMIC ECONOMIC JUSTICE COALITION HERE IN STRONG
OPPOSITION CALIFORNIA HAS MADE TREMENDOUS PROGRESS IN
ADDRESSING THE NUMEROUS WAYS CONSUMERS FACE PREDATORY
FINANCIAL PRACTICES AND PRIOR TO PASSING THE RATE CAP IN
TWENTY NINETEEN TRIPLE DIGIT INTEREST LOANS WERE WREAKING
HAVOC IN OUR COMMUNITIES AND DRIVING CALIFORNIANS INTO
SIGNIFICANT CYCLES OF DEBT AB TWENTY EIGHT THIRTY NINE IS A
STEP BACKWARDS I WOULD OPEN THE DOOR TO THIS TYPE OF LENDING
ALL OVER AGAIN INDUSTRY KEEPS TRYING TO CLAIM THAT THIS
TYPE OF LENDING HELPS CREATE ACCESS TO CREDIT AND THAT THIS
IS JUST UNDER THE UMBRELLA OF THE PILOT PROGRAM HOWEVER AS
ADVOCATES ON THE GROUND WE KNOW BETTER TO ADD FEES TO A LOAN
THAT IS ALREADY INTENDED FOR FINANCIALLY DISTRESSED PERSON
IS FISCALLY IRRESPONSIBLE IF THE CONSUMER NEEDS ALONE
IN THE FIRST PLACE ADDING MORE COSTS FIFTEEN THE LOAN
IS SIMPLY ILLOGICAL TWENTY TWO PERCENT OF LOANS MADE
UNDER THE PILOT PROGRAM WHERE DELINQUENT FOR SEVEN TO TWENTY
NINE DAYS ADDING COSTS THESE LOANS THROUGH A MAINTENANCE FEE
OR BY RAISING INTEREST RATES ALLOWED TO BE CHARGED WILL ONLY
MAKE THE LIKELIHOOD OF DEFAULT GREATER FOR THESE BORROWERS
NO ONE IS DOING ANY FAVORS BY OFFERING A PREDATORY SERVICE
TO FILL A GAP THAT HAS BEEN MADE BY LARGER SYSTEMIC ISSUES
THE VERY SAME SYSTEM THAT IS BECOMES THAT BECOMES OVERBURDEN
WHEN IMPACTED CONSUMERS SIMPLY CANNOT AFFORD TO TREAD WATER
ANY LONGER IN THE WAKE OF COBIT AND THE ECONOMIC PRESSURES IT
HAS CREATED FOR MANY FAMILIES IS NOT THE TIME TO SCALE BACK
OUR INNOVATIONS HAVE WORKED WITH MANY OF YOU TO MAKE SURE
THAT CALIFORNIANS WITH THE LEAST AMOUNT OF RESOURCES OF
ACCESS TO SAFE AND AFFORDABLE PRODUCTS ALLOWING THESE RATES
TO COME BACK IS TAKING US IN THE WRONG DIRECTION SO WHILE
THERE IS NOT A VOTE ON THIS MEASURE TODAY WE DO EMPLOYER
TO STAY THE COURSE AND CONTINUE SENDING THE MESSAGES THE
MESSAGE THAT BUSINESS ENTITIES THAT MAKE THEIR PROFITS OFF THE
VULNERABILITIES OF DISTRESSED CONSUMERS DO NOT HAVE A PLACE
IN CALIFORNIA OUR CONSUMERS AND OUR COMMUNITIES AND DESERVE
BETTER THANK YOU THANK YOU FOR YOUR TESTIMONY WE WILL NOW GO
TO PUBLIC FOR THOSE THAT ARE IN PERSON HERE IN THE ROOM
THAT WOULD LIKE TO EXPRESS OPPOSITION SIMPLY YOUR NAME
YOUR AFFILIATION AND POSITION
GOOD AFTERNOON DANNY CANDLE KAISER ON BEHALF OF BOTH
THE CALIFORNIA LOW INCOME CONSUMER COALITION AND THE
NATIONAL CONSUMER LAW CENTER IN OPPOSITION THANK YOU
GOOD AFTERNOON CHAIR MEMBERS JOSH WITH THE BAY ON BEHALF
OF THE CONSUMER FEDERATION OF CALIFORNIA AND OPPOSITION
THANK YOU FOR THAT ANY OTHERS IN OPPOSITION IN THE ROOM
SEEING NONE MODERATOR WE WILL NOW GO TO THE PHONES TO
SEE IF THERE ARE WITNESSES IN OPPOSITION SIMPLY THEIR
NAME AFFILIATION AND POSITION
THANK YOU MISTER TURNER AND LADIES AND GENTLEMEN IF YOU
WISH TO COMMENT IN A POSITION OF AB TWENTY EIGHT THIRTY NINE
YOU MAY PRESS ONE AND THEN ZERO AT THIS TIME ONCE AGAIN IF YOU
WISH TO COMMENT IN OPPOSITION OF AB TWENTY EIGHT THIRTY NINE
YOU MAY PRESS ONE AND THEN ZERO ONE MOMENT FOR OUR FIRST
COMMENT NINE FIFTEEN YOUR LINE IS OPEN PLEASE GO AHEAD GOOD
AFTERNOON MR CHAIRMAN BIRDS BECAUSE RESPONSE SAYS POPPED UP
THE WASHINGTON I'M ON POVERTY RESPECTFULLY IN OPPOSITION
ONE MOMENT PHARNEXT NINE NINE EIGHTEEN YOUR LINE
IS OPEN PLEASE GO AHEAD
FIFTY THREE LEVELS OF OUR COMMUNITY LEADER AND ACTIVIST
WHILE THE PASTOR ABOUT POSITION
NINE NINE YOUR LINE IS OPEN PLEASE GO AHEAD GOOD AFTERNOON
MEGAN THESE ON BEHALF OF PUBLIC COUNSEL IN STRONG OPPOSITION
NINE SIXTEEN YOUR LINE IS OPEN PLEASE GO AHEAD GOOD AFTERNOON
INDUSTRY WHEN SOMETHING HAPPENS LAWCENTER IN STRONG OPPOSITION
NINE TWENTY YOUR LINE IS OPEN PLEASE GO AHEAD YES -- YEAH
MOHAMMED KHAN -- COALITION OF THE STATE COMMUNITIES
AGAINST GERRYMANDERING ANIMAL NUMBER BUDGET MALABON
PRESSURE DISTRICT I'M IN OPPOSITION OF THE STATE THIS
IS FROM JORDAN THEN THAT
LINE SEVEN YOUR LINE IS OPEN PLEASE GO AHEAD YES
HI HEIDI PICKMAN FROM THE CALIFORNIA ASSOCIATION FOR
MICRO ENTERPRISE OPPORTUNITIES WE CAN RESPECTFULLY IN
OPPOSITION NINE EIGHT YOUR LINE IS OPEN PLEASE GO AHEAD
YOUR MEMBERS MY NAME IS BADLY BURNED BY HOT CALLING ON BEHALF
WITH A LOT OF WORK ON NATION AND I AM CALLING IN OPPOSITION
ONE TWENTY ONE YOUR LINE IS OPEN PLEASE GO AHEAD
YES GOOD AFTERNOON MY NAME IS HOLDEN MY FRIEND FROM THE
GREEN LINING INSTITUTE -- IN OPPOSITION NINE THIRTEEN YOUR
LINE IS OPEN PLEASE GO AHEAD
NINE THIRTEEN YOU MAY BE ON MUTE PLEASE GO AHEAD
REPUBLICAN AND NINE THIRTEEN YOUR LINE IS OPEN
ONE THIRTEEN HAS NO RESPONSE AND WE HAVE NO FURTHER
OPPOSITION IN THE QUEUE OF AB TWENTY EIGHT THIRTY NINE
THANK YOU MODERATOR WE WILL NOW BRING IT TO THE COMMITTEE
FOR QUESTIONS AND COMMENTS ARE THERE ANY QUESTIONS OR COMMENTS
FROM COMMITTEE AND AS WE BEGIN I DO WANT TO THANK THE AUTHOR
-- FOR -- OR RECOGNIZE -- THE AUTHOR FOR YOUR INTENTIONS AND
WANTING TO ADDRESS ACCESS TO FINANCIAL PRODUCTS SO -- FOR
THAT YOUR INTENTIONS ARE WELL NOTED AND -- I I I I ALSO THINK
THAT -- SINCE AB FIVE THIRTY NINE WHICH DID ADDRESS THE LOAN
-- SPECTRUM FROM TWENTY FIVE HUNDRED UP TO I BELIEVE IT WAS
TEN THOUSAND -- AND WHAT YOUR TRYING TO ADDRESS IS ACTUALLY
BETWEEN THE THREE HUNDRED AND TWENTY FIVE HUNDRED MARK
IS THAT CORRECT ALL RIGHT SO SO WITH THAT I THINK THERE'S
A VACUUM OF OF DATA WE WERE MISSING A LOT AND A LOT OF
DATA AND THE QUESTION WAS POSED BY PROPONENTS -- WHERE
DID THOSE PEOPLE GO BUT THAT WAS ACTUALLY FOR FIVE THIRTY
NINE WHICH IS NOT YOURS SPACE FOR THIS BILL THIS SPACE HAS
BEEN THE SAME SENSE HOWEVER WAS NOTED THAT THERE WERE SOME
-- A PILOT PROGRAMS THAT DID FAIL AND WE'RE DOWN TO ONE
LEFT SO WITH THAT -- I WOULD LIKE TO HEAR IF IF EITHER SIDE
HAVE YOU BEEN ABLE TO OBTAIN -- INFORMATION AND AND BE
ABLE TO FIND DATA TO SHOW WHAT HAS HAPPENED SINCE AB FIVE
THIRTY NINE -- ESSENCE THAT WENT INTO LAW AND -- I I ALSO
WANT TO ANNOUNCE THAT WE ARE EXCITED ABOUT THE FBI AND THE
NEW RESEARCH ARM THAT IS BEING BUILT THERE THAT I BELIEVE
WOULD BE OF VERY INTEGRAL TO BEING ABLE TO GET THE DATA THAT
I'M ASKING FOR HOWEVER HAVE YOU ALL BEEN ABLE TO FIND DATA
ON YOUR OWN MISTER CHAIRMAN BOB SO WE REALLY APPRECIATE DE
APENAS ATTEMPT TO TRY TO GET DATA FOR THIS PARTICULAR SPACE
UNFORTUNATELY THROUGH THE YEARS HAS NOT BEEN A REPORT THAT
SPECIFICALLY ADDRESSES IT FROM THE REGULATOR WHAT I CAN DO IS
EXPRESS -- SOME DATA THAT WE DO HAVE IN IT ALTHOUGH SOME OF
IT IS ANECDOTAL BECAUSE THERE'S NOT A FORMALIZED STUDY FROM OUR
REGULATOR ON IT IT'S THERE IS WHEN CALIFORNIA CONSUMERS GO
ON THE INTERNET AND THE ATTEMPT TO FIND A LOAN WHICH IS USUALLY
LIKE ALL OF US WEEKLY GOOGLE SOMETHING SO WHEN YOU GOOGLE
YOU'RE GONNA FIND MILLIONS OF HITS WHEN YOU GOOGLE CALIFORNIA
PERSONAL LOANS FOR CALIFORNIA INSTALLMENT LOANS THE THERE
ARE COMPANIES OUT THERE THAT CONSOLIDATE THIS DATA AND
PROVIDE LEADS TO COMPANIES THAT ARE LOOKING TO LEND TO THESE
CONSUMERS WHAT WE'VE SOUGHT FROM THIS SET OF DOUBT IS IN
TWENTY TWENTY THERE WAS OVER SIXTEEN MILLION REQUESTS FOR
LOANS THAT WERE DONE ONLINE AND OF THAT ONLY ONE POINT
FOUR PERCENT OF THEM WENT TO CALIFORNIA LICENSE LENDERS
SO WHAT DOES THAT SPEAK UP ALTHOUGH WE DON'T HAVE EXACT
OUT OF THAT THEY WENT TO THESE PARTICULAR LENDERS BUT WAIT A
MINUTE WE HAVE ALMOST NINETY EIGHT MORE THAN NINETY EIGHT
PERCENT ARE NOT LENDING A ARE NOT LANDING AT LICENSE LENDERS
IN CALIFORNIA I MEAN SOME AND IT'S NOT THAT NINETY PERCENT
DIDN'T GET LOANS SO LOGIC TELLS US THAT THEY'RE GETTING LOANS
ARE JUST NOT GETTING LOANS THAT ARE REGULATED BY THE DAPI AND
THANK YOU FOR THAT I APOLOGIZE FOR THE DISTURBANCE WE WILL
HEAR ALSO -- FROM FROM YOU AS FAR AS DATA I AM GOING TO HAND
CHAIR -- THE GAVEL OVER TO MR STONE I HAVE TO GO PRESENT AND
REVAN TAX THE BILL WERE THEY'RE GONNA CLOSED MEETING WITHOUT
HEARING FROM ME MR STONE IF YOU WOULD BE SO KIND AS TO TAKE
OVER PERFECT SO I WILL ADD AND AGAIN MY NAME IS LUCY A MATIC'S
WITH ANTIPERSPIRANTS BLENDING ALL ADD THAT AB FIVE THIRTY
NINE WENT TO EFFECT IN TWENTY TWENTY AND SHORTLY IF YOU MEANT
THREE MONTHS INTO THE YEAR THE PANDEMIC HIT RIGHT AND SO WE
SAW LENDING DOWN ACROSS THE BOARD NOT ONLY IN CALIFORNIA
BUT AROUND THE COUNTRY AND SO I THINK IT'S IMPORTANT
THAT WE LET THE D.
FBI GAME A LITTLE BIT MORE TIME TO COLLECT MORE DATA BUT
ALSO WE SAW THAT CONSUMERS WERE ABLE TO ACCESS LOANS THAT
THE BUY NOW PAY LATER PRODUCTS FOR EXAMPLE MADE UP FOR NINETY
ONE PERCENT OF NON BANK LOANS DURING THAT TIME AND TWENTY
TWENTY WHEN THE LAST DATA THE LAST YEAR WE HAVE DATA FROM
THE FBI SO FOLKS WERE ACT AND THOSE LENDERS ARE LICENSE IN
CALIFORNIA SO THE IDEA THAT FOLKS WERE NOT ABLE TO ACCESS
ANY LOANS IS NOT TRUE IN OUR IN OUR OPINION WHAT WE'VE
BEEN SPLIT WE'VE BEEN SEEING IN THE DATA AND WE HAVEN'T
HAD ENOUGH TIME SINCE EIGHTY FIVE THIRTY NINE HAS BEEN IN
EFFECT TO SEE WHAT THE IMPACTS ARE ON THE GROUND SO IN ORDER
TO DO THAT WE NEED SOME MORE TIME AWAY FROM THIS IRREGULAR
ENVIRONMENT THAT WE'RE IN DUE TO THE PANDEMIC TO SEE HOW
THESE LOANS BEAR OUT AND HOW THESE PROTECTIONS FOR CONSUMERS
I THANK YOU ARE THERE OTHER QUESTIONS COMMENTS MISS WILSON
THANK YOU TO DR AND MRS HELPS THE LEARNING I'M THANK YOU
TO THE AUTHOR AND OF THIS IS THAT REALLY IMPORTANT -- THE
PILOT PROGRAM IS VERY MUCH NECESSARY -- AND ACCESS TO
CAPITAL IS IS GOOD ESPECIALLY FOR THOSE WITH LOW CREDIT
ARMS ARE LOWER CREDIT SCORES OR NO CREDIT SCORES AT ALL
-- ONE CONCERN THAT CAME UP WHEN I WAS LISTENING TO THE
TESTIMONY TO EACH FOR THE BOTH PROPONENTS AND OPPONENTS OF
IT AND WONDER IF IT COULD BE CLARIFIED IT WAS NOTED -- IN
THE PROPONENT THAT -- IT IS IMPORTANT THAT IT'S SAFE AND
REGULATED AND IT WAS NOTED IN THE OPPONENT THAT IT SHOULD BE
SAFE AND AFFORDABLE SO COULD YOU EXPLAIN THE TWO DIFFERENT
WHAT THAT MEANS TO YOU IN TERMS OF SAFE AND REGULATED VERSUS
SAFE AFFORDABLE OR ONE OF THE
IF YOU DON'T MIND I CAN GO AHEAD AND FILL THAT ONE SO
OBVIOUSLY THERE'S A BALANCE THE PILOT PROGRAM'S BEEN AROUND
YOU KNOW FOR OVER TEN YEARS AND THERE'S GREAT CONSUMER
PROTECTIONS IN IT AND THE LENDERS THAT ARE LOOKING TO
LONDON OR WANT THOSE CONSUMER PROTECTIONS THEY WANT TO BE
ABLE TO TO CONTINUE TO OFFER THAT SO THIS IS THIS IS THE
BALANCE HOW DO YOU ATTRACT MORE LENDERS AND IN RIGHT
NOW IT'S NOT HAPPENING RIGHT THERE'S REALLY ONLY ONE LENDER
AND IT ISN'T IT'S NOT FOR THE LAST YEAR THIS IS BEEN GOING
ON FOR YEARS AND THE ONE AND WE FULLY UNDERSTAND THAT THAT
FIRST LENDER TOOK HIM SEVEN YEARS TO GET PROFITABLE SO
YOU'RE GONNA ATTRACT ANOTHER LIKE YOU KNOW OTHER LENDERS WE
DO HAVE TO FIND THAT BALANCE YOU'RE RIGHT WE WANT TO MAKE
SURE IT'S SAFE FOR THE CONSUMER THAT THEY HAVE ACCESS BUT IF
THE LENDER CANNOT LAND AND COVER THE EXPENSES YOU'RE JUST
NOT GONNA HAVE ANY LENDING AND THAT'S WHAT'S CURRENTLY
HAPPENING SO THAT IS THAT IS THE BALANCE WE HAVE TO FIND A
WAY TO COVER EXPENSES FOR THE LENDER AND WE BELIEVE THAT THIS
BILL IS DOING THAT OTHER STATES HAVE RECOGNIZED THAT THERE IS
ON GOING MONTHLY EXPENSES AND WE AND IT'S RECOGNIZING THAT
AND I BELIEVE THAT'S GOING TO HELP ATTRACT NEW LENDERS THAT
ARE WILLING TO BE LICENSED AND REGULATED AND AUDITED I THINK
THE THANK YOU FOR THAT QUESTION I WOULD SAY SOME OF THE OTHER
STATES POINTED TO THE ARE ALSO LEARNING FOR TRIPLE DIGIT
INTEREST RATES AND THAT'S GOING AGAINST THE AFFORDABLE PIECE
THAT YOU JEFF REYES AT THAT POINT SO THERE'S A BALANCE I
AGREE BUT MOVE IN THE DIRECTION OF CHARGING FORTY DOLLARS PER
MONTH ON ITS SURFACE REGARDLESS OF THE SIZE OF THE LOAN YOU'RE
LOOKING AT CHARGING SOMEONE ALMOST FIVE HUNDRED DOLLARS
A YEAR AT THE FORTY DOLLARS A MONTH -- THAT COST THERE AND
SO THERE ARE OTHER SOLUTIONS WE CAN EXPLORE BUT TACKING ON THAT
COST OF BOOKS AS I MENTIONED BEFORE WE'RE MAKING AT MOST
FORTY FIVE FOR THE MAJORITY OF THESE CONSUMERS ON THIS PROGRAM
AGAIN UNDER FORTY FIVE THOUSAND DOLLARS A YEAR THAT'S THE WRONG
SOLUTION AND WRONG CALCULUS BECAUSE THE EMPHASIS IS BEING
PLACED ON ON ON LENDERS AND HOW THEY CAN BECOME PROFITABLE AS
OPPOSED TO CONSUMERS AND HOW THEY CAN REALLY GET ACCESS TO
THOSE STATE LOANS BECAUSE AS I MENTIONED BEFORE THEY ARE
ACCESSING LOANS AND THE FINAL ACCESS TO CREDIT -- AND SO IF
WE WANT TO MAKE SURE THAT THIS PROGRAM IS STRONGER I THINK
THERE'S ANOTHER CALCULUS THAT WE CAN COME TO AND WE NEED
SOME MORE TIME TO COLLECT THAT DATA AND NOW TO THE CHAIR HOW
HOW DOES THE IT SAYS NOT TO EXCEED FORTY DOLLARS ON THE
MAX AMOUNT AND I THOUGHT I HEARD DURING THE TESTIMONY
THAT THERE POTENTIALLY COULD BE A TIERED SYSTEM AS OTHER
STATES MAY DO AND SO A LOT OF TIMES AND YOU SEE A MAXIMUM IT
USUALLY MEANS THAT FEMALE RATE AND THEN IT ALSO HAS THE JUST
FORMULATION SO IT SEEMS LIKE IF IF IT'S SET INTO -- AND IF
IT'S IF IT'S WRITTEN THIS WAY AND THERE'S NO CAP EVEN ON THAT
YOU COULD EVENTUALLY GET TO WHERE IT'S PRETTY OUTRAGEOUS
AND JUST ON THE EXAMPLE HERE IT HAS THE TRIPLE DIGITS WHICH
IS UP THE WHOLE POINT OF THE PREVIOUS LEGISLATION WAS TO
AVOID THAT YOU COULD COULD YOU TELL TALK TO ME A LITTLE
BIT ABOUT THE HOW THE -- THE MONTHLY MAINTENANCE FEE WORKS
IS EXPECTED TO BE FORTY DOLLARS PER -- LOAN AND IS IT EXPECTED
-- AND I DON'T SEE IT HAPPEN HERE BECAUSE THERE IS -- IN
TERMS OF HOW HIGH IT CAN GO IN TERMS OF THE ANNUAL INFLATION
EACH YEAR UNDERSTOOD AND ONE THING I WANT TO MAKE SURE WE
CLARIFY BECAUSE SOMETIMES IT GETS LOST THE INTEREST RATE
IS NOT A TRIPLE DIGIT INTEREST RATE THE INTEREST RATE IS
NOT CHANGING UNDER THIS BILL THERE'S A SET INTEREST RATES
THERE'S A DIFFERENCE BETWEEN THE TOTAL COSTS ALONE IN THE
ACTUAL INTEREST RATE IS ONE MAKE SURE THAT THE COMMITTEE --
RECOGNIZE THAT IT'S IT'S THAT THE MAXIMUM UNDER THE PILOT AT
THE MAXIMUM AMOUNT IS THIRTY SIX PERCENT ALTHOUGH THERE IS
ADDITION THIS MONTH THE MONTHLY MAINTENANCE FEE DOES INTRODUCE
ANOTHER COST SO WHEN YOU DO AN APR -- IT DOES SHOW THE NUMBERS
THAT WE SAW IN THE ANALYSIS I THINK WHAT IS HELPFUL AS
I THINK THE ANALYSIS DID A REALLY GOOD JOB OF POINTING OUT
SOMETIMES IT IS NOT THE BEST INDICATOR OF THE COSTA CREDIT
BECAUSE A LOT OF THESE LOANS ARE NOT OUT FOR YEARS YOU KNOW
OVER A YEAR OR TWO SO I THINK THAT'S IMPORTANT TO NOTE V.
THIS BILL IS A STARTING POINT INTRODUCING A TYPE OF STRUCTURE
THAT ALLOWS FOR MORE LENDERS I MEAN I THINK US AS THE A
COMMUNITY OF LENDERS THAT WOULD LIKE TO LENDER THIS WE'VE BEEN
TRYING WE'VE BEEN AT THIS FOR OVER WITH THE PILOT PROGRAMS
OVER ELEVEN TEN ELEVEN YEARS TRYING TO FIND SOMETHING
THAT DOES WORK WE'RE WE'RE OPEN AND WE BELIEVE THAT THIS
PROGRAM AND INTRODUCING A A A RECOGNITION THAT THERE'S
ONGOING EXPENSES ON A MONTHLY BASIS TO THE LENDER IN ORDER TO
HAVE THE BAR ACCESS THIS CREDIT BOB WE RESPECT THAT M.
AND WE RECOGNIZE THAT THAT THEY THE AUTHORS DONE A GOOD JOB
SHOWING THAT HEY THIS ISN'T EXPECTED EXPENSE IS IT FORTY
IS GONNA BE LESS THAN THAT THE WORLD INTO THOSE DISCUSSIONS
BOB WE'RE OPEN TO OTHER SOLUTIONS WE WOULD ASK YOU KNOW
THOSE THAT MAY BE IN OPPOSITION YOU KNOW THERE'S USUALLY A LOT
OF TALK ABOUT WHY THIS ISN'T WORKING BUT WE DON'T HEAR A
LOT OF SUGGESTIONS BY HER PAID BY NOW PAY LATER WE SAW A HUGE
INCREASE BUT IF YOU LOOK AT THE REASONS WHY PEOPLE DIDN'T
THE REASONS THAT THE REGULATOR STATED IN THE END REPORTS AS TO
WHY PEOPLE TAKE A PILOT PROGRAM LOANS IT'S NOT NECESSARILY
TO BUY GOODS YOU KNOW THERE'S EMERGENCIES AT THEIR EXPERIENCE
AND I THINK WE'RE GETTING ABOUT THE QUEST THE QUESTION WAS
SPECIFIC TO THE THAT THE FORTY DOLLARS FORTY DOLLARS YEAH AND
THEN IT SO EIGHT NINE OR DO YOU YOU ECHOED -- SOMETHING THAT
WAS SAID EARLIER IN TERMS OF NOT SURE FORTY DOLLARS IS THE
RIGHT NUMBER WHICH IN MY MIND FLAGS IT'S ARBITRARY AND SO
I WAS VERY BEEN ANY ANY DATA GIVEN AT ALL AND MAYBE NOT
HERE BUT DATA THAT IS AVAILABLE THAT SAYS IT USUALLY COSTS THIS
MUCH TO MAINTAIN A SMALL DOLLAR LOAN BETWEEN THAT FIVE HUNDRED
TWENTY FIVE HUNDRED DOLLARS IS A COST BECAUSE OF THE EMPLOYEES
THAT WE HAVE TO HAVE THIS IS THAT DATA THIS IS THE SOFTWARE
THAT WE HAVE TO INCLUDE YOU KNOW THOSE TYPES OF THINGS THAT
WAS THERE DO YOU HAVE ANY DATA THAT WOULD JUSTIFY THE WHITE
FORTY DOLLARS AMOUNT OR IS IT UNDER SO IT'S IT'S NOT EXACTLY
IT'S IT'S NOT ARBITRARY IN THAT THERE WERE IN THE THERE
WAS LOOK YOU LOOK AT OTHER STATES AND WHAT OTHER STATES
HAVE DONE AND AS WE MENTIONED I BELIEVE THAT MR MOFFETT'S
TESTAMENT HE MENTIONED THAT THERE WERE SEVERAL OTHER
STATES THAT HAVE PASSED THIS CONCEPT ONE OF THEM WAS OHIO
AND WE LOOK AT OHIO AND LOOKED AT WHAT THEY WERE DOING I
BELIEVE THAT THAT AMOUNT WE SAID IT THIRTY PERCENT HIGHER
BECAUSE OF HIGH BECAUSE COSTING CALIFORNIA THIRTY PERCENT
HIGHER THAN OPERATING IN THE STATE OF OHIO AND SO THAT'S
WHERE THAT NUMBER CAME FROM BOB IT RECOGNIZES THAT THE -- THAT
STATE DID SOME MATH CALIFORNIA WE RECOGNIZE THE COST OF
DOING BUSINESS HERE IS HIGHER SO THERE'S NO JUSTIFICATION
IF I HEARD CORRECTLY THERE'S NO YET JUSTIFICATION FOR THE
AMOUNT OF FORTY DOLLARS EXCEPT SETTING IT AT A RATE AGAINST
OHIO OF THIRTY PERCENT IN ADVANCE THAT WAS ONE WAY TO
GET TO THIS NUMBER -- AT THIS POINT AND I'M NOT PREPARED TO
GIVE YOU AN ACTUAL BREAKDOWN I DATED KHLOE DOLLARS RIGHT
HEARING CORRECTLY ON THAT OKAY
THANK YOU AND IT'S NOTED THAT OHIO HAS A VERY DIFFERENT
PROGRAM INCLUDING IN LOWER INTEREST RATES SO WHEN WE'RE
TALKING ABOUT THE FORTY DOLLARS A MONTH OR OR MONTHLY FEE
THAT'S VERY DIFFERENT AND YES WE'VE CAP SHE SO THAT A MEMBER
THIS COMMITTEE FOR A NUMBER OF YEARS WE'VE BEEN THROUGH THIS
AND THROUGH THIS AND THROUGH THE SENATE TOOK A NUMBER OF
YEARS TO GET TO A POINT WHERE WE COULD GET ENOUGH CONTROL
OVER INTEREST RATES AND AND TRY AND PROTECT CONSUMERS IN
THIS SPACE TO THE TO THE EXTENT THAT WE HAVE SO IT'S I GUESS
SOME FOR ME A LITTLE SKEPTICAL ABOUT THIS STEP RIGHT NOW
ESPECIALLY WITH THAT THE LACK OF DATA THAT WE HAVE BEEN IN
THE SMALL DOLLAR LOANS AND WHEN I LOOK AT THE RESERVE OPPOSE OR
FORTY DOLLARS A MONTH ON A FIVE HUNDRED TO TWENTY FIVE HUNDRED
DOLLAR LOAN IS A LOT AND THE INTEREST RATE IS THERE FOR A
NUMBER OF THINGS YES YOU TALK ABOUT A FEVER SINCE AN INTEREST
RATE BUT TO CONSUMER ITS COST OF MONEY TO THAT CONSUMER AND
WE'RE TALKING GETTING BACK TO SOME EXTRAORDINARY AMOUNTS OF
MONEY THAT CONSUMERS CAN END UP HAVING TO PAY FOR THAT ORIGINAL
LOAN TO THIS COMMITTEE HAS BEEN THE VERY WARY OF THESE KINDS
OF RELATIONSHIPS UP FOR ME I'M WAS CLASS THAT THIS WAS AN
INFORMATIONAL HEARING I THINK IF WE HAVE QUESTIONS ABOUT
THE EFFECTIVENESS OF THE PILOT PROGRAM OTHERS WORK THE LOANS
AVAILABILITY IN THIS DOLLAR RANGE OKAY THAT'S A LEGITIMATE
CONVERSATION TO HAVE BUT WITHOUT THE DATA AND THE FACT
IS THAT THE REGULATOR STARTING TO LOOK AND COLLECT SOME OF
THAT INFORMATION I THINK THAT'S GOING TO BE MUCH MORE USEFUL
FOR US TO BE ABLE TO MAKE DECISIONS OFF OF THAT AND THEN
A PROPOSAL LIKE THIS SO HAVING BEEN AROUND THIS FOR SUCH TIME
JUST CALL ME SKEPTICAL AT THIS POINT ANYWAY -- I THINK THAT
EXHAUSTS ARE QUESTIONS MR THE APPROVER YOU MAY CLOSE YES
WELL AT THE END OF THE DAY I THINK WE WE ALL NEED A ROBUST
A PROGRAM FOR CALIFORNIA AS YOU HEARD A LOT OF FOLKS ARE GOING
TO OUT OF THE STATE AND I LIVE IN THE COMMUNITY THAT YOU KNOW
GOING ON ONLINE SOME SOMETIMES PEOPLE DON'T TRUST THAT I MEAN
THEY DON'T THEY WANT TO GO INTO A STORE AND TALK TO SOMEONE
THEY WOULD LIKE TO SEE TOUCH AND SPEAK AND AND BE ONLINE
SOMETIMES YOU DON'T HAVE THAT AND THERE WERE SOME QUESTIONS
BEING ASKED ABOUT YOU KNOW WHY THE COSTS EXPENSIVE WE'RE IN
CALIFORNIA A REMINDER SO EVEN IF YOU COMPARE OTHER STATES
ARE STILL LIVING CALIFORNIA TO PUT A STOREFRONT IT'S NOT
CHEAP IT'S EXPENSIVE YOU KNOW SO -- WE HAVE TO HAVE SOMETHING
THAT PEOPLE CAN RELY ON PEOPLE TO HAVE TRUST THAT THEY CAN
WE ARE WE ARE GOING TO SO MANY ISSUES AND PROBLEMS IN
CALIFORNIA THAT PEOPLE DON'T KNOW WHO TO TALK WHO TO TURN
TO AND ALL WE'RE TRYING TO DO IS MAKE SURE THAT IT WHEN THEY
NEED ALONE THAT THEY CAN GO TO THAT STORE THEY CAN GO TO THAT
PERSON WHO THEY FEEL THEY'RE TO ME THAT THEY CAN TRUST SO I L.
LEAVE THAT WITH YOU CHAIRMAN MEMBERS THANK YOU FOR YOUR
TIME TODAY THANK YOU CAN THINK OF RIGHT WE JUST HAD
ONE ITEM OF INFORMATION ONLY AND WITH THAT WE ARE ADJOURNED