Assembly Standing Committee on Banking and Finance

The Assembly Banking and Finance Committee is called to order, and sergeants, if you will please call the absent members. We don't have a quorum right at the moment, so we will start as a Subcommittee. Welcome to the Assembly Banking and Finance Committee.

Whether you are here in person or watching virtually, I am grateful that you have joined us in Room 444. I do want to note that we are accepting written testimony through the position letter--the Position Letter Portal on the committee's website, and with that, it is time to move on to the hearing.

Again, we don't have a quorum, so we are starting as a Subcommittee, and we don't have a consent calendar today, so we will turn to our items on file. File Item Number One: AB 3148: Assembly Member Chen: the recommendation is that the Senate amendment be concurred in. Assembly Member Chen, when you are ready, you can start with your opening statement.

Thank you, Mister Chair. I really appreciate your time. If I may, first start off with a point of personal privilege. I want to thank your leadership as this is the official last banking finance Committee on the Assembly side for Mister Chair Tim Grayson.

You know, I've been in the Assembly since 2016, and it's been a privilege to be able to work with you since I've been Vice Chair and candid with you. I'll keep this a secret that you're my favorite chair to work with.

Not only are you a person of public policy acumen, no one works harder than you, but you're a man of integrity. So I'm also happy to know that you won't be leaving us too far and you'll be going to the Senate side. So I want to thank you for your leadership.

I also want to thank the incredible Committee consultants, both on the democratic side, as also a Republican consultant, Liz, for all your hard work. But I want to thank you for all that you do really appreciate your candor, your integrity, and all your hard work. Mister Chair. Thank you. Thank you, Vice Chair Chen. Thank you, Miss Dixie.

That'll be the only motion she'll be seconding today. So again, thank you for allowing me to present AB 3148. Currently, payday loan letters are required to pay license fees based on the number of brick and mortar locations the licensee operates in California.

In recent years, the number of these brick and mortar locations has decreased significantly and online transactions have continued to grow. At the same time, Department costs to administer the payday loan program have continued to increase.

Both online and in store transactions are legal and regulated by DFPI, but basing fees on number of locations they operate in state not based on the volume of business they conduct in California, has led to an inequitable rise in costs.

This bill would change the problem by requiring DFBI to assess fees to payday loan licenses based on the volume of business in California as opposed to the number of brick and mortar locations.

Here to testify, we have Mister John Moffitt, on behalf of the California Financial service providers to provide additional background and answer any questions that you may have.

And before your testimony, let's establish a quorum. Thank you, sir. Secretary, please.

[Roll Call]

And you may begin with your witness testimony.

Good morning, Mister Chair. Members of the Committee. John Moffatt, on behalf of the California Financial Service Providers, we are the trade Association for the entities that pay these fees. We appreciate the author bringing this bill forward.

I think the author's statement, and, you know, as always, the Committee analysis lays out precisely what we're trying to do right now. Fees are based on the number of locations, not the volume of business.

I think this Bill sort of modernizes the assessment structure to be consistent with the five or six other programs at DFPI where fees are assessed based on volume of business out in the marketplace.

You could have one licensee with, you know, doing online loans, doing $10 million in business every year, and another licensee with five brick and mortar locations that's doing $1.0 million in business every year, and that one entity with five locations, each of those licensed is paying five times the fee amount that the, you know, the one online lender is paying.

Both good transactions, both legal transactions, everyone following the law. But it really just, the bill more closely aligns the volume of work with the volume of business and just as I said, modernizes the fee structure. With that, we ask for your support and happy to answer any questions.

So we do thank you for your testimony. We do have a motion by Assembly Member Dixon, and we do have a second by Assembly Member Fong. Are there any other witnesses in the room that would like to express their support? Seeing none. No witnesses on file in opposition. Any opposition in the room? Seeing none as well.

We'll bring it back to Committee for questions. Comments? Seeing none. Thank you so very much, Assembly Member Chen. Vice Chair Chen, would you like to close?

I respectfully ask for an aye vote.

Very nice close. Thank you so much. And with that, I do want to thank the Vice Chair as well for your partnership and work. We've made a great team in the banking, finance Committee. It's been wonderful working with you. And we'll have secretary call the roll.

Thank you, Mister Chair.

On the bill, AB 3184 the motion is send amendments be concurred in three. I apologize. AB 3148. [Roll Call]

The bill has five votes. We will keep the roll open for absent Members to come in. And the motion does pass. And as we have more Members coming in, I am going to hand the gavel over to Vice Chair Chen as I step out for a moment.

I will return to adjourn here in just a little bit of we will keep the roll open for absent Members.

On the bill AB 3148, the motion is Senate amendments be concurred in. [Roll Call]. That bill has six votes.

On the bill AB 3148, the motion is the Senate amendments be concurred in. [Roll Call]. Seven votes.

Eight. On the bill AB 3148, the motion is the Senate amendments be concurred in. [Roll Call]. The bill has eight votes.

Thank you.

The Banking and Finance Committee is now adjourned. Thank you.