Number of California Payday Loan Stores Down by 34 Percent - OppLoans

Number of California Payday Loan Stores Down by 34 Percent - OppLoans Number of California Payday Loan Stores Down by 34 Percent Number of California Payday Loan Stores Down by 34 PercentInside Subprime: September 17, 2019By Grace AustinThe number of payday loans have reached a record low in California, according to the latest reports.    The state’s Department of Business Oversight is saying that, according to lender reports from 2018, the number of payday loans taken out and the amount of the loans overall is falling. It’s now the lowest since 2006. Those figures currently stand at 10.2 million and $2.8 billion, respectively. The number of payday loans taken out in California has now declined every year for the past five years, according to American Banker.  The number of lenders has also fallen, dropping by 34 percent according to state lender data. As stated in the 2018 payday loan report, the number of licensed locations has dropped to 1,645 from a high of 2,493 in 2006.Despite such promising figures, other numbers reflected startling payday loan trends within the state. Payday lenders charged an aver age annual interest rate of 376 percent in 2018, which is still exceedingly high.  And it’s clear the statewide industry depends on select loyal, repeat customers for business. Repeat customers took out just over 80% of the total amount borrowed within California. More than three-quarters of subsequent loans to repeat customers were issued within a week of the previous loan coming due.The repeat customers are taking out many loans, too. One of every four customers took out 10 or more payday loans, and the average number of payday loans is still high, despite declining a small amount â€" at 6.31. Repeat customers who took out seven or more loans paid 70% of a total of $420.5 million in fees that the industry collected on payday loans.And chronic loan borrowers were some of the lowest socioeconomic groups. Half of all payday loan customers had average annual incomes of $30,000 or less, and about a third earned $20,000 or less a year.  The DBO, which regulates hundreds of thousands o f financial entities in the state, does report that the industry, instead, is moving toward larger installment loans.  â€œOn the one hand, it’s encouraging to see lenders adapt to their customers’ needs and expectations,” DBO Commissioner Manuel P. Alvarez said in the press release. “But by the same token, it underscores the need to focus on the availability and regulation of small-dollar credit products between $300 and $2,500, and especially credit products over $2,500 where there are largely no current rate caps.”The number of unsecured consumer loans over $5,000 but under $10,000, has increased 26.2 percent in 2018; those loans under $2,500 have increased by 13.1 percent; and the number of unsecured consumer loans between $2,500 and $4,999 increased by 11.4 percent.California’s state legislature passed a bill in May that would limit interest rates at 36% on installment loans between $2,500 and $9,999. More than 55 percent of the installment loans between $2,500 and $ 4,999 had interest rates of 100 percent or more, according to the 2018 report.Learn more about payday loans, scams, and cash advances by checking out our city and state financial guides, including Illinois, Chicago, California, Anaheim,  Bakersfield,  Chico,  Fresno,  Los Angeles,  Modesto,  Oakland,  Redding,  Riverside,  Sacramento, San Diego, San Francisco, San Jose,  Santa Barbara,  StocktonVisit OppLoans on YouTube | Facebook | Twitter | LinkedIn