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New county ordinance to restrict lenders that are payday. Santa Clara County Board of Supervisors passes ordinance to block check-cashing companies

New county ordinance to restrict lenders that are payday. Santa Clara County Board of Supervisors passes ordinance to block check-cashing companies

Santa Clara County Board of Supervisors passes ordinance to block check-cashing organizations

The Board of Supervisors passed an ordinance Tuesday evening, May 1, that obstructs payday loan providers and check-cashing organizations from starting brand brand new branches within the unincorporated aspects of Santa Clara County.

Payday loan providers and check-cashing outlets behave as a substitute for old-fashioned banking institutions by providing short-term loans and may charge interest that is effective of as much as 460 per cent, county officials said. Board of Supervisors President George Shirakawa stated they passed the ordinance because such loan providers are “predatory” and target residents that are low-income.

In line with the Center for Responsible Lending, such financing companies are disproportionately situated in African-American and Latino areas, county officials said. Supervisor Mike Wasserman stated which he thinks such payday advances only drive borrowers deeper into debt.

“The high interest levels charged by payday loan providers entangle borrowers in a vicious period,” Wasserman stated.

The board made a decision to make sure that payday financing and check-cashing organizations try not to transfer to the unincorporated county areas if San Jose as well as other towns and cities additionally pass similar ordinances, relating to Andrea Flores Shelton, deputy chief of staff for Shirakawa’s workplace. Continue reading