Mayor Newsom and Treasurer Jose Cisneros launch new payday lending program
12/17/09 – Mayor Gavin Newsom and Treasurer José Cisneros today announced the launch of Payday Plus SF, an alternative payday loan offered by six San Francisco Credit Unions that will provide responsible small dollar loans of up to $500, with low interest rates, financial counseling, and an extended repayment term. The program is designed to help San Franciscans avoid high-interest rate payday loans that often trap borrowers in a cycle of debt.
For-profit payday lenders may charge annual interest rates of over 400%, and the industry relies for 90 percent of their revenue on borrowers who repeatedly renew or re-open their payday loans. As a result, the typical borrower usually pays around $500 in interest for a $300 loan, and still owes the principal, according to the Center for Responsible Lending. Read more