Lieu Introduces Legislation to Stop Payday Lenders from Aggressively Targeting Military Families

(Sacramento, CA) – Today Assemblyman Ted W. Lieu (D-Torrance) introduced AB 1965 that will protect military members and their families from abusive lending by payday loan companies. This bill will require payday loan companies to follow a strict set of rules and regulations when following up with members of the armed forces who have outstanding loan advances, including deferring any collection activity against a member who has been deployed, or their spouse.

“Many payday loan companies have already started applying practices that are protecting the young men and women who serve in our military,” said Lieu, who is a veteran of the U.S. Air Force and previously served on active-duty. “However, AB 1965 will ensure that every payday loan company will be held to the same standards—standards that clearly protect our military from being taken advantage of by payday loan companies and having their credit damaged beyond repair.”  

AB 1965 allows a military member and their spouse to defer payment on a loan, prohibits payday loan companies from garnishing a military member’s salary, prohibits contacting the military chain of command of a member in order to obtain a payment, and requires a payday loan company to honor all terms and agreements of any replacement arrangement between a lender and a military member.

Even a small loan can accrue interest rates upwards of 500 percent annually. Many people find it difficult to repay the loan and have to take out more loans to cover the fees and repay the debt. 

Jerry Yamamoto, President of the South Bay Chapter of the Vietnam Veterans of America, praised Lieu for tackling this tough issue.  “I think it’s fantastic that Assemblymember Lieu is standing up for our young men and women in uniform,” said Yamamoto. “I know first-hand how hard it is to be a young recruit in the military; they need increased protections.”

The 53^rd Assembly District includes the cities of Torrance , Lomita , Redondo Beach , Manhattan Beach , Hermosa Beach , El Segundo, the communities of Playa Del Rey, Marina Del Rey, Westchester , Venice , and Mar Vista, and portions of West Los Angeles .