It seems the laws regarding payday loans in the state of California are constantly changing. Over the past few years, California has gone from a moderate state regarding online payday loan laws but the support for direct payday lenders has quickly eroded. In 2013 alone there were countless laws brought for debate in the state house that concerned online payday loans in California. These laws ranged from limiting the number of days someone can have their loan out for to how many online payday loans can be issued to one person at any given time. Interestingly, there seemed to be more emphasis on changing online payday loans California compared to the traditional method of writing loans. As it stands now the maximum amount that direct payday lenders can loan at any given time is $300. On top of that, the loan can not be “rolled over”. This means you can’t keep paying interest on the loan as each payment period comes up. There is a maximum loan term of 31 days on any payday loans issued in the State of California. Consumer advocates fought for this change over the past few years. Their reasoning was that when a direct payday lender rolled over a loan it simply got the consumer caught up in a long payday loan spiral. Essentially when the consumer rolls over their loan each payday they’re never going to pay off the loan. Especially if they’re on a fixed income.
There promises to be just as many new laws and regulations brought forward that attempt to legislate cash advance loans over the next few years. California may not be following the mold of other states that have completely banned payday loans all together but the state is not that far off from severely limiting the payday loan process. We expect there will be moves made to limit international direct payday lenders from loaning to California residents. Also, there’s bound to be more pressure put on the national Indian tribes from California and other states concerning their sovereign rights to issue direct payday loans. Effectively these tribal payday lenders are saying the laws don’t apply to them regarding how much they can charge and how long the loans can be issued for. It will be very interesting to see how these fights shake out. There are also changes occurring with lenders that only work online. These companies have no store front locations and their only way of pushing loans is through online search engines and other online ad campaigns. California lending laws are bound to see different changes over the later part of 2017, but the most promising changes will undoubtedly occur with the new online lenders that are launching.
Just last year we saw an interesting case brought before the courts in California that touched on the tribal lending side of things. Long story short, a California appeals court upheld the dismissal of a complaint that attempted to regulate a handful of tribal payday loan lenders. The court affirmed the tribes were sovereign and that there was really nothing else the state of California could do to stop these tribes from operating as payday loan lenders. In all likelihood, this case is not done and it will end up at the supreme court. This case is just one component of the legal issues confronting direct payday lenders that attempt to operate in the state of California. CAsh advance or short term loans are not going away anytime soon, but it will be an interesting year as more restrictions are likely put in place. Online payday loans California will probably decline when it comes to the number of lenders but we assume there will be just as many people looking for online loans in California.
Online Payday Loans will still be available in California in 2016 and beyond!