Earlier this year, neighborhood advocates for a moratorium and distance limitations on fringe lenders approached the members of the BHC Long Beach Steering Committee for their support on this issue. The BHC Long Beach Steering Committee agreed to endorse these efforts and several members participated actively in this campaign.
After several legislative meetings and Planning Commission sessions, it ultimately came down to the final vote of the City Council. Last night, the City Council voted unanimously (8-0) to approve the “Financial Services Ordinance,” which will create a buffer zone of at least 1,320 feet between fringe financial storefronts, require conditional use permit and set forth operational standards that these businesses must follow.
Liana Molina, the payday campaign organizer with the California Reinvestment Coalition, applauded the council’s vote and the advocacy carried out by neighborhood leaders and community organizations to pass the ordinance. She explained, “This ordinance is a strong step forward in addressing the over-proliferation of high cost, predatory lenders and alternative financial services throughout the city. The community is working hard to transform and improve various neighborhoods in Long Beach, and this ordinance is an important tool that will help protect neighborhoods from being targeted by this industry.”
Mauna Eichner and Lee Fukui, residents of Wrigley, are part of a group of community leaders who advocated for the ordinance. They explain, “Predatory lenders depress our neighborhood and strip money out of our local economy, right out of the pockets of our neighbors who can least afford it. Tonight the city council did the right thing and sent a strong message that the vitality of Long Beach residents and neighborhoods is more important than profits made off of loans with upwards of 450% interest rates. We are pleased with the Council’s decision and are confident that this policy will help advance our goals of making Long Beach a great place to live.”
About the California Reinvestment Coalition: The California Reinvestment Coalition (CRC) advocates for the right of low-income communities and communities of color to have fair and equal access to banking and other financial services. CRC has a membership of close to 300 nonprofit organizations and public agencies across the state of California.
Additional Background on Payday Lenders and other fringe lenders:
CRC is working with Fresno community leaders to restrict payday lending in their city, and is part of the Coalition against Payday Predators, that successfully advocated for limiting payday lending in San Jose and is working to restrict payday lending in Sunnyvale and Gilroy.
A state bill, SB 515 supported by advocates including the California Reinvestment Coalition, the Center for Responsible Lending, the Law Foundation of Silicon Valley and National Council of La Raza, would have limited the number of loans a person can receive annually, and also would have lengthened the amount of time borrowers have to pay back the loan. SB 515 was defeated in the Senate Banking Committee and did not move forward in 2013.