Coalition launches bus ad campaign to discourage payday loan usage among San Jose residents
June 20, 2012– Community groups and advocates stepped up their campaign against the predatory payday loan industry this week by launching bus advertisements on VTA’s Route 22 and other bus lines in Santa Clara County. The “Don’t Get Trapped!” ads build on the City of San Jose’s recent ordinance restricting payday lending in the city.
The San Jose City Council recently voted 9-1 to approve a land use ordinance banning new payday loan operations from opening in low-income neighborhoods and capping the total number of payday loan outlets allowed in the entire city at the current number of 39. San Jose is the largest city in the country to impose a capon the number of payday lending shops, and the first to adopt a ban on new payday lending businesses in low-income census tracts. The Santa Clara County Board of Supervisors also voted unanimously to impose a permanent moratorium on payday loan businesses in unincorporated areas of the county.
“Families living paycheck to paycheck, struggling to make ends meet, often fall prey to payday lenders’ offers of fast, convenient cash advances. Borrowers often don’t realize that a two-week, $300 loan ends up costing hundreds of dollars to pay off, after their circumstances lead them to repeatedly borrow what in essence is the same $300 over and over again,” said Kyra Kazantzis of Public Interest Law Firm, a program of the Law Foundation of Silicon Valley.
Payday loans are small dollar, short-term loans that charge borrowers nearly 459% APR. Studies indicate that the average payday loan consumer in California takes out about 10 payday loans per year. Because many consumers lack adequate income to pay off their loan and meet their necessary expenses, they often have to takeout additional payday loans to bridge their cash shortfalls. The high cost of these loans, coupled with their short repayment period, trap many borrowers in a cycle of debt.
“The payday loan product and industry strips millions of dollars of wealth from individuals and communities across our state,” said Liana Molina of the California Reinvestment Coalition. “That’s why local communities are fighting back and many cities and counties are doing what they can to rein in the payday loan industry.”
The ads—featuring commissioned art by well-regarded Bay Area printmaker Favianna Rodriguez and funded by the Silicon Valley Community Foundation—will run on VTA buses from Palo Alto along El Camino Real, The Alameda, Santa Clara Street, King Street to Tully and Eastridge shopping center. Some ads will be on busesoriginating from the Chaboya Yard which will be circulating around the Santa Clara County Fairgrounds, Monterey Road, Downtown San Jose, Story Road, Hellyer Park, the Almaden area and Campbell. Other ads will be featured on buses from the Cerone Yard and will be circulating around San Jose Flea Market, Alum Rock Park, Overfelt Gardens, Downtown San Jose, the Great Mall, and Milpitas.
The Coalition Against Payday Predators (CAPP) led a two-year advocacy and education campaign that led to the passage of the ordinances passed in the City of San Jose and Santa Clara County. CAPP is poised to expand its advocacy efforts to other cities in Santa Clara County, and is marking this new phase by launching its “Don’t Get Trapped!” ads. The ads are intended to raise public awareness about the payday loan debt trap, and to encourage consumers not to use payday loans.
The South Bay Coalition Against Payday Predators (CAPP) is a collaboration of community-based organizations including Public Interest Law Firm (PILF), California Reinvestment Coalition (CRC), Sacred Heart Community Service, Asian Law Alliance, Alliance of Californians for Community Empowerment (ACCE),United Way Silicon Valley and Step Up Silicon Valley. With support from Silicon Valley Community Foundation,CAPP is working to limit the reckless financial practices of payday lenders in San José and the south bay by supporting local payday lending controls ordinances that will stop further proliferation of payday lenders in the region and pave the way for better consumer lending alternatives.