Payday loan providers and check-cashing outlets behave as an alternate to conventional banking institutions by offering short-term loans and certainly will charge effective rates of interest as much as 460 %, county officials stated. Board of Supervisors President George Shirakawa said they passed the ordinance because such loan providers are “predatory” and target low-income residents.
Based on the Center for Responsible Lending, such financing companies are disproportionately situated in African-American and Latino payday loans Utah communities, county officials stated. Supervisor Mike Wasserman stated which he believes payday that is such only drive borrowers deeper into debt.
“The high interest levels charged by payday loan providers entangle borrowers in a cycle that is vicious” Wasserman stated.
The board determined to make sure that payday financing and check-cashing companies try not to transfer to the unincorporated county areas if San Jose along with other towns and cities additionally pass comparable ordinances, based on Andrea Flores Shelton, deputy chief of staff for Shirakawa’s workplace. The San Jose City Council is planned to take into account one such ordinance May 15.