California’s State Department of Business Oversight reports consumer loans taken out with alternative lenders, such as title loan and payday loan companies, has increased by 49 percent since 2015. These lenders reported providing loans totaling more than $34 billion. With this large increase also come much higher APRs of as much as 180 percent. State laws limit APRs on short-term loans up to $2,499, but there are no caps on loans exceeding that amount. The California Reinvestment Coalition fears that the high interest rates trap borrowers in a long-term debt cycle. This is something the state feels needs to be addressed, just as the federal government has been addressing it. With the huge increase in payday loans and title loans, California’s government officials are looking at tightening lending rules. While the commissioner of the Department of Business Oversight sees the increase in loans as a good sign in the state’s economic health, she is concerned that borrowers are paying such amounts in interest. Reports show that more than half of those who took out consumer loans paid more than 100 percent in interest. One of the big fears is that when borrowers take out a title loan, they’re risking their car. Even after losing their vehicle, many borrowers end up in court after learning they still owe money. Not everyone understands that if the title loan company is unable to sell the vehicle for the total amount owed, the borrower is responsible for paying the different. With more than 116,000 title loans taking out in 2015, this is of particular concern to state agencies. In 2015, the chairman of the Assembly Banking and Finance Committee introduced a bill to revise the laws. While the vote in favor of the bill was unanimously in favor of the changes, it’s stuck in the senate for now. Hopes are high that something will happen before more borrowers fall victim to shockingly high interest rates on payday and title loans in California.