Payday lending has been a contentious issue in California, where new rules were implemented in 2013. There were no restrictions on the amount of interest or fees that payday lenders could charge prior to the new legislation. Many Californian debtors were consequently required to pay yearly interest rates of over 400 percent. The new laws include restrictions on the amount of interest and fees that payday lenders may charge. Currently, borrowers must attend financial counseling before applying for a payday loan. These new rules are intended to prevent borrowers from becoming caught in debt traps with high-interest loans. Read more here
