California has been one of the states that has suffered the most from the economic downturn in the recent years. Most of the citizens that were living from paycheck to paycheck found themselves in debt with the prospect of no job or opportunities. Many California citizens, and those living in Modesto particularly, decided to use payday loans as a way of tiding themselves over. It has had short term advantages, but things are starting to become problematic for debt holders. In order to protect these people from lenders, Modesto legislation has been put forth in order to prevent predatory lending. The latest news from Modesto indicates that legislation has again failed to take action.
Payday Loans in Modesto California
The payday loan industry has made a pretty penny off of the people in Modesto, California. A new report from the Center for Responsible Lending has showed that California people are accounting for over $570 million for the payday loan industry. That is the second highest in the entire United States and among the unregulated states, these lenders are having a field day.
Many of the people who are paying these millions of dollars are living in the Modesto region. This is why the latest legislation was aimed at stopping predatory lending and implementing some of the laws that assist in reining in these types of loans. There are literally millions of individuals across the country who need protection, but it seems slow to come for those in the Modesto region.
One of the largest problems with the latest legislation failure is the fact that it includes so many bigger lenders. Because it has been very difficult to regulate this high interest rate lending, people are starting to get the same type of loans from businesses like Wells Fargo and other well known banks. These have more clout and can help to protect the industry from legislation at the local and federal level.
What is Next for Modesto?
As the latest legislation fails to pass in Modesto, California, (and the state as a whole), the question of the payday loan industry in the state becomes one of curiosity. What will happen to the industry if they cannot operate unhindered? Will they be forced to change their practices and do things differently?
It is an interesting series of questions, but there is no real solid answer. Most of the people in the Modesto region and California are hoping there will be some protection and relief in the near future. While most do not think that they can get all of their problems solved with regulation, it is a step in the right direction for the public.
Right now, the battle becomes how to actually pass legislation that is fit for everyone. Public opinion is against predatory lending, but legal statutes give these businesses the right to practice whatever they want so long as it is within the bounds of the law. It will be tough to restrict them, but legislation must continue through the country. Also bare in mind that all lenders must be licensed in the State of California which includes internet payday lenders.
