Can Local Governments Provide Protection to Vulnerable Communities in California a State Which Has Legalized Predatory Payday Lending and Failed to Pass Reform

The payday lending industry provides small dollar loans to persons across the United States. Although their product is marketed as temporary, the majority of borrowers cannot repay the underlying amount and exorbitant interest rates within the deceptively advertised time period. As a result, most borrowers remain indebted to payday lenders for approximately half of the year and must forgo basic necessities in order to extricate themselves from payday debt. This Note seeks to clarify the mechanics of payday lending, provide the surrounding historical and legal context, and explain the industry\u27s especially negative impact on low-income and minority communities in California. Lastly, this Note suggests how California local governments can use targeted transparency to better inform and protect their residents while waiting for more substantial statewide reform