Payday loan providers and check-cashing outlets behave as an alternate to old-fashioned banking institutions by providing short-term loans and will charge interest that is effective of as much as 460 %, county officials stated. Board of Supervisors President George Shirakawa stated they passed the ordinance because such lenders 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 communities, county officials stated. Supervisor Mike Wasserman stated which he thinks payday that is such only drive borrowers deeper into debt.
“The high interest rates charged by payday loan providers entangle borrowers in a cycle that is vicious” Wasserman stated.
The board determined to ensure payday financing and check-cashing organizations usually do not transfer to the unincorporated county areas if San Jose along with other towns additionally pass similar ordinances, based on Andrea Flores Shelton, deputy chief of staff for Shirakawa’s workplace. The San Jose City Council is scheduled to take into account one ordinance that is such 15.
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“We don’t desire those businesses relocating,” Shelton stated, incorporating that the payment is certainly not depriving them of current services, just growth that is limiting.
Based on the board, there are many than 2,000 payday loan providers in their state, surpassing the sheer number of Starbucks places.