Santa Clara County Board of Supervisors passes ordinance to block check-cashing companies
The Board of Supervisors passed an ordinance Tuesday evening, May 1, that obstructs payday loan providers and check-cashing companies from starting brand new branches within the unincorporated regions of Santa Clara County.
Payday loan providers and check-cashing outlets work as an alternate to old-fashioned banking institutions by providing short-term loans and will charge interest that is effective as high as 460 per cent, county officials stated. Board of Supervisors President George Shirakawa stated they passed the ordinance because such loan providers are “predatory” and target low-income residents.
In accordance with the Center for Responsible Lending, such financing companies are disproportionately positioned in African-American and Latino communities, county officials stated. 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 cycle that is vicious” Wasserman said.