Assembly Banking And Finance Committee Approves Lieu Bill Protecting Military From Predatory Lenders

Sacramento, CA – The Assembly Committee on Banking and Finance today approved AB 7 by Assemblymember Ted Lieu (D-Torrance) to extend strong financial protections for members of the armed forces and their families.  The bill had unanimous support from members of both parties.

Lieu, a former military prosecutor, praised the committee’s action.  “This is an issue that Democrats and Republicans can agree on – that unscrupulous lenders should not be targeting the young men and women who are defending our nation in a time of war.”

In October of this year, the United States Congress approved legislation to stop predatory lenders from targeting military personnel and their families. The federal protections, passed as an amendment to the Senate Defense Authorization bill, call for a 36% annual interest rate cap on loans to military personnel and their families that is consistent with recent recommendations by the Department of Defense.

Assemblymember Lieu’s legislation, AB 7, will strengthen enforcement of the federal protections for military personnel in California.  It updates existing financial law to specify that when lenders provide products to military personnel they must abide by the federal law.

Lieu authored a bill last year, AB 1965 that included many of the protections in the federal act, including the provision capping the interest rate to military personnel at 36%, but it did not make it to the Governor’s Desk.  AB 1965 was the first bill in the nation to implement recommendations by the Department of Defense to protect military personnel from predatory lending practices.

AB 7 will now move to the Assembly Appropriations Committee.