Millions Of Californians’ Paychecks Are Being Stretched To The Brink.
California has one of the highest costs of living in the nation.1 Combined with the fact that many workers face increasing income volatility – meaning paychecks can swing 25 percent above or below average, depending on the week or month2 – it’s increasingly difficult to budget and save for even expected expenses.
of California households report that their incomes varies from month to month.3
of California households would be unable to cover their basic living costs for three months if they faced an unexpected financial expense.4
3 in 5
Latino households live in "liquid asset poverty."5
All Hard-Working Californians Deserve Access To Safe, Trustworthy Credit When They Need It.
As it is, many of these Californians struggle to get credit access through a traditional bank; further restricting access to credit does nothing to address this need for credit. Instead, California should focus on protecting consumers’ access to a range of safe, convenient, licensed loan options that can help them deal with unexpected expenses.
1 in 3
Nearly 1 in 3 Californians have a subprime credit score or no credit score at all,6 meaning they likely struggle to access credit through a traditional bank or credit union.
1 in 5
1 in 5 California households that applied for bank credit in 2015 were denied and hundreds of thousands more were discouraged about applying for bank credit.7
Nationally, banks have restricted their lending to these middle-class Americans to the tune of -$143 billion less non-prime credit since 2008.
Don’t Lock Middle-Class Californians Out From Credit Access.
Eliminating legitimate, regulated short-term credit without viable alternatives hurts, rather than helps, consumers. Consumers should have more rather than fewer choices.
- AB 539 (Limón) will eliminate more than half of installment loans between $2,500 and $10,000, resulting in unmet consumer loan demand of $1.4 billion.
- Without access to safe, reliable credit options, borrowers will be forced to overdraft their bank accounts, declare bankruptcy or seek loans from other illegal, offshore lenders to get the money they need.
- 1 Scott Cohn, “America's 10 most expensive states to live in 2017,” CNBC.com, 7/11/17.
- 2 Jonnelle Marte, “Why some families who save constantly are still struggling to make ends meet,” The Washington Post, 4/11/17.
- 3 California State Outcome Profile, Prosperity Now Scorecard, Accessed 3/8/18.
- 4 California State Outcome Profile, Prosperity Now Scorecard, Accessed 3/8/18.
- 5 California State Outcome Profile, Prosperity Now Scorecard, Accessed 3/8/18.
- 6 "Community Credit : A New Perspective on America's Communities," Federal Reserve Bank of New York, Accessed 1/24/18.
- 7 FDIC National Survey of Unbanked and Underbanked Households, Federal Deposit Insurance Corporation, 2015.