June 26,2019

Statement by Gerard Scimeca, Vice President, Consumer Action for a Strong Economy (CASE), in response to today’s California Senate Banking hearing on Assembly Bill 539

“A.B. 539 is exactly the wrong prescription for California’s most vulnerable consumers who rely on short-term, small dollar loans to make ends meet in times of financial need or emergency. This government price control bill will undoubtedly lead to higher costs and squeeze out millions of consumers from access to credit, especially for those who do not have traditional banking relationships. This bill will also create a shell game that will allow some lenders to continue engaging in unscrupulous lending practices, such as aggressively selling useless credit insurance and other add-on products, that significantly drive up the cost of loans. This will not only force more scrupulous lenders out of the market but will game the system at the expense of the very consumers the legislation is supposed to protect. I hope California legislators see this effort for what it is, crony capitalism at its worst.”

You can read CASE’s latest opinion piece on this bill here: Real Clear Markets: Interest Rate Caps Don’t Protect Borrowers, They Just Make Borrowing Difficult.

CASE is the nation’s foremost non-profit, non-partisan organization devoted to the singular cause of promoting consumer interests through the advancement of free-market principles. For more information, visit: https://caseforconsumers.org/, @CASE_forAmerica