The Center for Responsible Lending, Consumer Federation of California, and National Consumer Law Center submitted comments to the Department of Financial Protection and Innovation’s (DFPI or Department) Proposed Regulations Under the California Consumer Financial Protection Law and the California Financing Law, California Deferred Deposit Transaction Law, and California Student Loan
Servicing Act, PRO 01-21.
These comments focus on the regulation of income-based advances and other fintech cash advances and on the amendments to the California Financing Law (CFL) clarifying the scope of the CFL and the charges subject to it. We have joined other comments on other aspects of the proposed regulations.
Twenty-four labor, consumer and civil rights groups in California also submitted comments applauding the California Department of Financial Protection and Innovation for proposed rules on earned wage advances. In recent years, many affirmatively harmful financial products and practices have been pushed on underserved communities in the name of “access to credit” and “financial innovation.” In reality, these products are nothing more than traditional predatory financial products that carry a fintech veneer. The groups know from firsthand experience that low-income and marginalized communities, especially Black and Latino ones, are more likely to be at risk from these predatory products. In this rulemaking, the Department has taken on abuses by several of these products, including earned wage advances.