NO. 8241434
IN THE SUPREME COURT
OF THE STATE OF CALIFORNIA
EDUARDO DE LA TORRE,ET AL.,
Plaintiffs and
Petitioners,
Vv.
SUPREME COURT
CASHCALL,INC., FLED
Defendant and
Respondent. FEB 74 2018
Jorge Navarrete Clerk
On a certified question from the
United States Court of Appeals for the Ninth Circuit,
Case Nos. 14-17571, 15-15042 Deputy
AMICUS CURIAE BRIEF OF CALIFORNIA FINANCIAL
SERVICE PROVIDERS ASSOCIATION,FINANCIAL
SERVICE CENTERS OF AMERICA, COMMUNITY
FINANCIAL SERVICES ASSOCIATION OF AMERICA, AND
ONLINE LENDERS ALLIANCEIN SUPPORT OF
RESPONDENT
JAMES R. MCGUIRE (SBN 189275)
©
NANCY R. THOMAS (SBN 236185)
MORRISON & FOERSTER LLP MORRISON & FOERSTER LLP
425 Market Street 707 Wilshire Boulevard, Suite 6000
San Francisco, CA 94105-2482 Los Angeles, CA 90017-3543
Telephone: (415) 268-7013 Telephone: (213) 892-5561
Facsimile: (415) 268-7522 Facsimile: (213) 892-5454
JMcGuire@mofo.com NThomas@mofo.com
Counsel for Amici Curiae,
California Financial Service Providers Association, et al,
TABLE OF CONTENTS
Page
TABLE OF AUTHORITIES......c i cceeecesnessessscesereassinetsnsecanetennensreesasenesneens 4
INTRODUCTION...cecccceeeereeccesscensnsesieeteneseneuseansusecasensbecseaeenagersesensooeenreee 9
ARGUMENT.....csscecseccesreeeses wll
I. PETITIONERS’ INTERPRETATION OF THE
CALIFORNIA FINANCING LAW WOULDLIMIT
ACCESS TO CREDIT IN DIRECT CONTRAVENTION TO
THE STATUTE’S PURPOSE... cecccessecssssssencecenrnennenneenerneentennenes 11
A.
_
There is a robust and competitive market in California
for unsecured loans of $2,500 or more...........05 wav ll
B. These loans and lenders are heavily regulated under
federal and state laW..iscceecseseeecetserenseeereutsoneaeesansteasdedivie 14
Cy Adhoc judicial second-guessingofinterest rates
would limit the supply of credit... ssseesesstesernesceiuereenees 17
Il. LIMITING ACCESSTO THIS TYPE OF CREDIT WOULD
A, Subprime consumer loans makecredit available to
those who might not otherwise be able to borrow.............+5 18
B. Therisk of a judicially imposed cap on interest rates
would force consumers into WOrSE OPTIONS... 21
Il. REGULATING INTEREST RATESIS AN INHERENTLY
LEGISLATIVE TASK o....ceessecenres sesasens 2D
A, TheState’s legislative and executive bodies already
comprehensively regulate interest rates and other
aspects of consumer lending -.....cssseceoressereenereennerennettaneney 26
B. Imposing caps oninterest rates requires decision-
makers to weigh competing policy considerations—a
task uniquely suited to the Legislature..........ssiieteersoees 28
CONCLUSIONacissecrscoscessecertivssdeeressnnensaeaereceanscaessannereaaene renee ere 30
CERTIFICATE OF COMPLIANCE10... cccseseenceneenaesccsrsesensesatecanseaes 3]
TABLE OF AUTHORITIES
Page(s)
Cases
Allied Properties v. Dept. ofAlcoholic Beverage Control
(1959) 53 Cal.2d 14] vissvcsescesiscearseniesescesseusrestssseeresescatareaenereneeneseey 25
Cel-Tech Communications, Inc. v. Los Angeles Cellular
Telephone Co.
(1999) 20 Cal4th 163 oe cccsseccsensessneseneeentersecnseesecenecantenesteaeeenaenes 17
De La Torre v. CashCall
(9th Cir, 2017) 854 F.3d 1082 ..esseeceesssecsseneresencesesesercasersareeseentengs 9
In the Matter ofFlurish, Inc., d/b/a LendUp
(Sept. 27, 2016) 2016-CFPB-0023....essescsccentenererererrecneenseniiaerrenasins 15
Harris v. Capital Growth Investors XIV
(1991) 52 Cal.3d 1142iccseeeseesaepseeteserensenpsaansse bai nbieageddpeneowistdetsene aes 29
Max Factor & Co. v. Kunsman
(1936) 5 Cal.2d 446ocessessereeeseseseseeenseseertentdnnenmnnisnesadeeatees 25
Statutes and Rules
12 U.S.C.
§ S53 D cecescseesenecanseeneenssmnuseesaceasepeennenscaesaseasenentsnniaaseeasussarenssecsstenvenserstesey 14
§ 5562 vsccsenceescsersersseonsecenssenseaesestdsssbecagneseheeessnanansvhedanseeceeeereseeevastenesteey 14
§ 5564 csecssceseessensseseesnsnnestenenvestgetnestectiens sini cvanai cateieda sebsnahaveesebeesy seeteecees 14
15 U.S.C.
§ 1601 et SOQ. rcercsersesssscserssecssetinsteriesevadeesevencreseresesntsnenensidedveneneerseensesey 14
§ 1638(a)...ccsccesesessenesoevesessesansnssentbecesssnsssessencsesenseasesessseeesearssagssenentenses 14
12 C.F.R.
Pt. 1026 oo eecececeneneviesnsecessecsecnsseensetenansensnaeererenseneseeerasternanaenseesesaenazes 14
§ 1026.14 crccsecccciceeinserseereeneessauadeussuvassasdsiaessrenssqrangoensrsonsneaguegsnseeiaebins 13
§ 1026.14(D).c.sccceeesssnesesecensmneesseneceessenesecencanersenenerensesenscsasesncadietesasensa cits 20
Alabama Code § 8-8-5 viscssisscssccsicerseeecnenenenenernerteesannsenseenresrevegierenernes es 26
TABLE OF AUTHORITIES
(continued)
Page(s)
California Finance Code
§ 21000 et SOQ. ...eccssssessrecsnteseeeeeeetesstessisubecsesscsasersteeseretsisesseenssessesseveees 20
.
§ 21051 weessdbeissscnapenstostas Wied eshavassesenes peeeseasverasessssenicessstessenessensens D4
§ 22000 et Seq. veces eaeedeasenesidnveens baaenseeteneteevest¥ns anes deesnasenetens serene 8, 15
§ 22001 weeGasknenenent cnet seeseenveguncessescesavectsseceuavesennenns diseenseeertecsenneee LS
§ 22100, Sub. (8)vecesrccniareccisecerseesctenecenteressessctaeseasertresens saneesanesers vay 15
§ 22151 ssscccscorssaneseccsacnsarsenmesnnsesunnensnnenneeeenranneonssness serbtighd babes rnesannen stir’ 15
§ 22156 vrcceescessseertenertenvensererees veeeananenetensenes’ seadesdedensbsceasetraserseaseacensivien LO
§ 22ST co iccessecnsceenreseeeeestensennseaasonnets sniscebestavneseiatetendesptinediniitetversseesvares LS
§ 22159, subd.(a)........ asecsus cenbon dbtesaseanaepebandavtanednenedeiesss dienssevastsersterseess 16
§ 22163 oecceerees eidjashisvevégcvenneseasdunerencentespernensaeenadesnssriiesntineanerecnivcees LS
§ 22164 oesieibesinnevnnevdavedsedvavisesaatiase dayteagevensateneeetieasserecorseereeseeee LO
§ 23000 et seq. ...escuss subi avaidtigsindvesveesVensetcincovessonsavacneesvsnorenoveenmunngerccesare LO
§ 22307, SUD. (D) isciecccrsisesrrteressseenscesestesceesesesnienenererenectese daneerenententes 15
§ 22320.5, subd. (8) sssseeccsereers dhesennenseane daseaenegeecetensaneveaesaeesanenes eseeagvreeaee LS
§ 22365cccocanevsdevspasgeseasenecanevensrentaeoaasensnenes beseenenenneneescseA
§ 22365, subd.(b)...ueedavsueeneeasuevapessancaneaassesaavsrtdins eusbvinebevaenneeassende QL
§ 22713 vecseerrecennee: igiesedliddesvivenscbsatesiseatitsdnecabaniia soreanueiarrsrccics 16
§ 23035 wevousabscnasagaatiachiddevide'eseunensvdceceversosesnenmnsapanneesseeceeverserepteasaee LO
§ 23036 oo eeeereenes cade stisbasdavaedavatbeveceenenstcasietne coanerercesedeexees severeeeensonasers _19
Cal. Code R: tit. 10al. Code Regs., tit 10,
§ 1430 CRETE OF CN EASES ESNEOs eeOeODE ERATRORT COREE eee HEIObeeeeon POTEET RES 16
§ 1452 ws.daniiacovsseviveseacenssoeest senda ssevncveensuavecesancenpeneenpencsensaaiuniivis hes sista LS
California Rules of Court, rule 8.204(C) ciccsscsesterteestereeeseerrress bevededbvees31
California Sen. Bill
No. 896, Ch. Law 90 (2014) ..csccccsessssencesseesesaeessrstusseetiaiesenseesensnneenees 27
No. 235, Ch. Law 505 (2015)......... coscanpassennnsdedendelabebbsheintovassnteveesiedaicecs D7
No. 984, Ch. Law 480 (2016 v..ccccscscsssecccsssensssetssnsusnetenssecaesssaviencseneseene 27
California Assem. Bill No. 1109 (2017-1108 Reg. SeSS.) icici28
Idaho Code § 28-42-201....... suprepes raps isbesdegadie indie seaneser cas iapeewess conisiktansseeses wes 26
Kansas Stat. Ann. § 16a-2-40 1 ..cccsesssessssstcnetecissensvenssenreenssenseeeseaesvercceeties 20
Nevada Rev.Stat. Ann. § 675.010 et SQ. 0. ciceesecesesnersereretisiersstennsenrees 26
TABLE OF AUTHORITIES
(continued)
Page(s)
South Carolina Code Ann. § 37-3-201(2)(b) vcesseseccseccesentetbecevrseterreseres 26
Utah Code Ann. § 706-2-10] wees eceseerrcetssbeeesteenseeesouenteiveseseeesrtncesees 26
Virginia Code Ann. § 6.2-15 20...cccscecerceneeternsvereauasennseeteneessopepavecses 26
Wisconsin Stat. § 422.202(2m) oo. cecccsseeseresseceseneeeecneeetersntecctesccenasveaaeeeas 26
Other Authorities
Anderson, California bill seeks to limit interest rates on auto
title, finance loans, Sacramento Bus. J.
(Mar. 22, 2017)... cccccsscesrsereteersceeesessnsesseenssaensrsenstepsessrerssaettarenssacnsveeseny 28
Antonakes & Twohig, The CFPB Launchesits Nonbank
Supervision Program (Jan, 5, 2012) cessesseesenseenestenens 14-15
Assem.Bill No. 1109 (2017-2018 Reg. Sess.) cesccsctessucesecesseresersceseerensee 28
Beales & Goel, Small-Dollar Installment Loans: An Empirical
Analysis (Mar. 20, 2015) Navigant ECOnOmics........sesscssssereceeseeseens 25
Bhutta et al., Consumer Borrowing After Payday Loan Bans
(2016) 59 J. L. & Econ, 225 ivsccccsserevsreesiecreeeadvo vad suarun encased sues 23, 24, 25
Board of Governors of the Federal Reserve System, Regulation
Z: Compliance Guide...cescesscsccessnsiens Geaseteeeeesecerstenteenseneaencety 14
Board of Governors of the Federal Reserve System,
Report on Economic Well-Being of U.S. Households in
2015 (May 2016) oc. cccsecssseserccesisncesseeseceesenosesenetenereaassasneeneeceaenes 21, 22
California Department of Business Oversight (DBO) California
Financing Law ....cscsecoscesscrssesssenccenssvisseeenserresecsuenenaranennesenneisnaseatresade 8
CFPB Finds Small Debit Purchases Lead to Expensive
Overdraft Charges (July 31, 2014) weesccmeteeneree gadbbtpabiaded siandooases 23
ConsumerFinancial Protection Bureau,
CFPB Study of Overdraft Programs (June 2013)..cesesseereseeastenes 23
DBO,Annual Report: Operation of Finance Companies
Licensed Underthe California Finance Lenders Law (2010) wesiscseee 12
TABLE OF AUTHORITIES
(continued)
Page(s)
DBO, Annual Report: Operation of Finance Companies
Licensed Underthe California Finance Lenders Law (2013) ........0 12
DBO, Annual Report: Operation of Finance Companies
Licensed Underthe California Finance Lenders Law (2016)11, 12, 13, 18
DBO,Installment Consumer Lending by Non-Banks Grew
More Than 21 Percent in 2016 (July 10, 2017)...ce ceceseeeertensecnneees 17
DBO,Report of Activity Under the Pilot Program for
ResponsibleSSmall Dollar Loans (Jan. 1, 2015—Dec.31,
DBO, Summary Report: California Deferred Deposit
Transaction Law—AnnualReport and Industry Survey
(2016) cciccsccseercrssrerneraseronvireasecetseneeamseenareesenencenibersinaseneneenddbeaneenaneersteneey 20
Federal Deposit Insurance Corporation (FDIC), 2015 FDIC
National Survey of Unbanked and Underbanked
Household oo..ccccceseseeseseesreereresssesneccsnsensisersuesseses cieneerstneesievedteciscares LL
FICO Blog, U.S. Average FICO Score Hits 700: A Milestone
for Consumers (July 10, 2017) oo.ec eeereceneeevennnienentavieennseate 19
Morgan & Strain, Payday Holiday: How Households Fare after
Payday Credit Bans
(Nov. 2007; revised Feb. 2008) ......usecninsnensassrterarecansnestiassensanveseses 24
Summary of Enforcement Actions (Administrative and Civil)
by the California Department of Business Oversight (Nov.
2017)vssrssetedaccssiiecessessssuereaavisvecsanucesevsaneeeattedsrastesasernnagearentenensqonteesesseanens 16
Zinman, Restricting consumer credit access: Household survey
evidence on effects around4 Oregon rate cap ow) 34 J.
Banking & Finance 546.. na cesexureences Cosennenapeanapencnssniniba chesgviveseneaened 24
The California Financial Service Providers Association (CFSP),
Financial Service Centers of America (FiSCA), Community Financial
Services Association of America (CFSA), and Online Lenders Alliance
(OLA), respectfully submit this brief as amici curiac in support of
Respondent. CFSP represents over 60 California small-dollar lenders and
moneyservice businesses that offer financial services to consumers at over
1,500 store front locations throughout the State. FiSCA is a national trade
association representing neighborhood financial service centers across the
country, including state-licensed small-dollar lenders. FiSCA’s
membership consists of 346 companies operating over 4,100 store front
locations. CFSA is a national organization dedicated to advancing financial
empowerment for consumers through small-dollar, short-term loans. CFSA
was established to promote laws and regulations that protect consumers
while preserving their access to credit options, and to support and
encourage responsible industry practices. OLA represents the growing and
innovative industry of companiesthat offer loans online.
Amici and their members are committed to providing access to
small-dollar credit in a transparent and competitive market. Amici support
ethical and responsible business practices, including through the promotion
of industry best practices and ethical codes of conduct. Amici’s members
operating in California are regulated by the California Department of
Business Oversight and conduct their businesses in accordance with the
California Financing Law.' Amici each have members that make loans
' The California Financing Law (Fin. Code, § 22000 et seq.) was
recently renamed by statute and waspreviously knownas the California
Finance Lenders Law. (See Cal. Dept. of Business Oversight, California
Financing Law
(as of Feb. 4, 2018).)
over $2,500 to California consumers. These loans typically carry an
interest rate similar to the rates charged by Respondent, with whom they
compete in a heavily regulated market. These interest rates are market
driven, and reflect the risk of loans made to subprime borrowers.
INTRODUCTION
This Court accepted the United States Court of Appeals for the Ninth
Circuit’s certified question to decide whether “the interest rate on consumer
loans of $2,500 or more governed by California Financial Code § 22303
[can] render the loans unconscionable under California Financial Code
§ 22302.” (De La Torre v. CashCall (9th Cir. 2017) 854 F.3d 1082, 1085.)
The Court should answerthat question in the negative.
Despite Petitioners’ strenuousattempts. to paint Respondentas a lone
wolf acting without constraint, the facts demonstrate otherwise.
Respondent and amici’s members lend in a highly competitive market.
There are dozens of lenders who provide access to credit with the type of
loans at issue here. This market includes public and private companies,
some of whom lend nationwide, and it continues to grow as new lenders
enter. As in all markets, consumer choice among lenders constrains loan
prices.
Federal law, the California Legislature and the California
Department of Business Oversight comprehensively regulate lending by
Respondent and by amici’s members. These lenders are subject to
licensing requirements and extensive disclosure obligations as well as
regulations on substantive loan terms. Within this carefully crafted set of
federal and state regulations, and consistent with a statutory goal of
ensuring access to credit, the Legislature eliminated rate caps for loans of
$2,500 or more.
Petitioners’ position that courts can step in and potentially impose
precisely these caps would carry a range of negative consequences and
ultimately harm rather than help consumers. The kind of market
uncertainty created by after-the-fact, ad hoc judicial determinations would
disrupt the robust market for these loans. Lenders such as amici’s members
would be forced to scale back their credit offerings or exit the market
altogether because of the uncertainty created by the potential for expensive
litigation and second-guessing of underwriting decisions long after the
loans were made. This is exactly the opposite of the Legislature’s statutory
goal of ensuring access to credit.
Limiting access to credit in this manner would leave consumers with
fewer and potentially worse options for borrowing money. The subprime
consumer lending market fills a gap for borrowers whoare unable to obtain
loans from banks. As the Legislature implicitly recognized in removing
interest rate caps on these loans, lenders must ensure the price ofthese
loans is commensurate with the risk of unsecured lending to borrowers with
poorcredit histories. The reduction in credit that would result from judicial
regulation would not eliminate these borrowers’ need for credit. It would
simply require them to resort to other sources they view as less
advantageousor leave them unable to obtain needed funds altogether.
The judiciary’s necessary focus ontheparticular case before it does
not allow for the complex weighing of competing policy considerations
required here. The Legislature has been and continuesto be active in this
arena. The determination of whether interest rate regulation is needed, and
if so, the nature of that regulation, shouldbe left to the Legislature, not the
courts;
10
Fy
BA
BE
A
R
ARGUMENT
I PETITIONERS’ INTERPRETATION OF THE
CALIFORNIA FINANCING LAW WOULD LIMIT
ACCESS TO CREDIT IN DIRECT CONTRAVENTION
TO THE STATUTE’S PURPOSE.
A. There is a robust and competitive market in
California for unsecured loans of $2,500 or more.
Many California borrowers with poor credit history use the kinds of
loan products at issue here. They may not beableto obtain credit cards or
traditional loans from banks because, for example, they have prior
bankruptcies or defaults in their credit history. (See CashCall Br. pp.11,
15-16 [describing Petitioners’ testimony about negative credit history].)
Consumers with poor credit rely on alternative financial services to obtain
loans, such as subprime loans, payday loans, tax refund anticipation loans,
rent-to-own services, and pawnshop loans. (See Federal Deposit Insurance
Corporation (FDIC), 2015 FDIC National Survey of Unbanked and
Underbanked Households,p. 1.2) The FDIC foundthat in 2015, 7.7 percent
of American households had used these types of services to obtain credit in
the past twelve months. (/d. at p. 6.)
California consumers rely heavily on these types of loans,
According to the Department of Business Oversight (DBO), in 2016,
consumers obtained more than half a million loans for amounts between
$2,500 to $4,999. (DBO, Annual Report: Operation of Finance Companies
Licensed Under the California Finance Lenders Law (2016) p. 2 (hereafter
* Available at
(as of Feb.
4, 2018).
11
DBO 2016 Report).’) Over 400,000 of these loans were unsecured. (/d.at
p. 10.) These loans, then, are not “niche” products offered only by
CashCall as Petitioners assert. (Pls.’ Reply Br. p. 5.) Rather, this is “one of
the largest categorics of consumer loans.” (DBO 2016 Report, supra, at
p. 2; and see sources cited in CashCall Br. pp. 13-14.)
DBO licensed almost 3,000 companies to make loans under the
California Financing Law in 2016. These non-bank lenders operate over
6,500 branches across the state. (DBO 2016 Report, supra, at p. 3.)
Several of these non-bank lenders are public companies that operate
nationwide. And the marketfor the loans at issue here continues to expand
over time. (Compare DBO, Annual Report: Operation of Finance
Companies Licensed Under the California Finance Lenders Law (2010)
p. 9° with DBO, Annual Report: Operation of Finance Companies Licensed
Under the California Finance Lenders Law (2013) p.10 [number of
consumerloansin this range tripled between 2010 and 2013].°)
These myriad non-bank lenders compete with each other for
borrowers’ business. Loan disclosures are heavily regulated by the federal
Truth In Lending Act and by state law. (See, infra, at pp. 14-15.) These
disclosures allow consumers to compare loan terms, including interest
* Available at
http://www.dbo.ca.gov/Licensees/Finance Lenders/pdf/2016%20CFLL%
20Annual%20Report%20FINAL%207-6-17.pdf> (as of Feb. 4, 2018).
“ Available at
(as of Feb. 4, 2018).
> Available at |
(as of Feb. 4, 2018).
12
rates. For example, an internet search using the terms “California cash
installment loan” returns results from a wide array of different lenders
offering loans for $2,500 or more.
These lenders offer competitive rates in the range ofthe rate offered
by Respondent. In 2016, DBO found that more than 60 percent of
unsecured loans for amounts between $2,500 to $4,999 had an annual
percentage rate (APR) of 100 percent or higher. ° (DBO 2016 Report,
supra, at p. 16; and see CashCall Br. pp. 13-14 [discussing similar interest
rates reported by DBO when the complaint was filed in 2010].) These
rates, charged by Respondent and other non-bank lenders in a competitive
market, reflect the risk of unsecured lending to borrowers with poor credit
histories and the related extremely high default rates for which these
lenders have no recourse. (CashCall Br. p. 12 [noting a 45 percent default
rate]; DBO 2016 Report, supra, at p. 32 [reporting over 110,000 defaults in
unsecured loans for amounts between $2,500 to $4,999].) These high
interest rates offset other types of costs as well, including the costs of
underwriting and servicing loans, as well as high costs of credit to the
lenders themselves. (See 7-SER-1494 999-13 [discussing CashCall’s
costs].)
As in other competitive industries, then, Respondent, amici’s
members, and other non-bank lenders set prices based on the cost of doing
business. The high interest rates reflect those costs and are tempered by
consumers’ ability to go elsewhere.
° APRis the standardized cost of credit metric that lenders must
calculate and disclose in accordance with federal regulations. It is the cost
of credit expressed as an annualrate, including loan feces, interest, and other
specified costs to the consumer. (See 12 C.F.R. § 1026.14.) It is designed
to allow borrowers to comparecredit terms offered by lenders.
13
B. These loans and lenders are heavily regulated under
federal andstate law.
Federal and state laws, regulations, and regulators ensure consumers
can make informed lending choices.
The Truth In Lending Act (TILA) (15 U.S.C. § 1601 et seq.) andits
implementing regulation, known as Regulation Z (12 C.F.R. pt. 1026),
impose a comprehensive federal regulatory system governing loan
disclosures. As the Federal Reserve Board explains, “[a] principal purpose
of TILA is to promote the informed use of consumer credit by requiring
disclosures about its terms and cost. TILA also includes substantive
protections.” (Board of Governors of the Federal Reserve System,
Regulation Z: Compliance Guide.’) Among other things, lenders must
disclose APR and all other relevant terms, including payment due dates,
payment amounts, and prepaymentpenalties. (15 U.S.C. § 1638(a).)
TILA is administered by the Consumer Financial Protection Bureau
(CFPB), which has authority to promulgate further regulations and to bring
enforcement actions against lenders that engage in “unfair, deceptive, or
abusive acts or practices” engaged in by lenders. (See 12 U.S.C. §§ 5531,
5562, 5564.) The CFPB operates a program specifically focused on the
supervision of non-bank lenders, and it has not hesitated to exercise its
authority to bring enforcement actions against such lenders targeting
alleged unfair, deceptive, or abusive disclosure or lending practices.
(Antonakes & Twohig, The CFPB Launches its Nonbank Supervision
” Available at
(as of February
4, 2018).
14
Program (Jan. 5, 2012)*; see, e.g., Consent Order, In the Matter ofFlurish,
Inc., d/b/a LendUp (Sept. 27, 2016) 2016-CFPB-0023 [settlement of CFPB
complaint alleging errors in loan finance charges and APRs dueto faulty
APRcalculator].)
California law similarly imposes extensive regulations on
Respondent and amici’s members operating in the State. (See generally
California Financing Law (Fin. Code, § 22000 et seq.) (the “CFL”).) The
goals of the CFL include fostering competition and ensuring an adequate
supply of credit in the State, and protecting borrowers against unfair
practices. (Jd. § 22001.) The CFL and its implementing regulations
impose:
e Lender licensing requirements (id. § 22100, subd. (a));
e Numerousdisclosure obligations (id. §§ 22151, 22163, 22164);
¢ Underwriting requirements, ensuring lenders consider the
borrower’s ability to repay the loan (Cal. Code Regs., tit. 10,
§ 1452.)); and
e Substantive loan term requirements, including caps onlate fees
and a requirement that installment loan payments be made in
substantially equal amounts. (Fin. Code, §§ 22320.5, subd.(a),
22307, subd. (b).)
Respondent and amici’s members are subject to extensive record
maintenance requirements. (/d. §§ 22156, 22157.) In addition, they must
§ Available at (as of February 4, 2018).
15
file annual reports with DBO. (/d. § 22159, subd. (a).) These reports must
be made available to the public (subject to limited exceptions) and must
contain information such as the lender’s balance sheet, income statement,
amounts and types of loans originated, and default rates. (Cal. Code Regs.,
tit. 10, § 1430.)
DBO has supervisory authority over Respondent and amici’s
members operating in California. DBO schedules examinations of lenders,
spends weeks analyzing every aspect of lending practices, disclosures, and
internal procedures, prepares detailed findings, and requires responses and
changes to practices and procedures it deems out of compliance with state
regulations. DBO also has enforcement authority to bring actions for
administrative, civil, and criminal remedies, including for violations of the
CEL. (See, e.g., Fin. Code, §§ 22707.5, 22713, 22753.)
DBO routinely passes matters identified in examinations over to
enforcement, bringing administrative actions seeking injunctive relief,
restitution, and penalties. DBO has pursued many such administrative
actions, including against Respondent and other non-bank lenders. In the
month of November 2017 alone (the most recent month for which such data
is available), DBO reported actions taken in 23 different matters, including
five matters involving alleged unlawful activity under the CFL. (Summary
of Enforcement Actions (Administrative and Civil) by the California
Department of Business Oversight (Nov. 2017).’)
* Available at
(as of
Feb. 4, 2018).
16
As far as amici are aware, neither DBO nor the Attorney General,
which also has authority to bring such actions, has ever pursued an action
against a lender alleging unconscionable interest rates. Rather, DBO has
repeatedly recognized that “[s]tate law does not restrict interest rates on
[CFL] loans of $2,500 or more.” (DBO, Installment Consumer Lending by
Non-Banks grew morethan 21 percent in 2016 (July 10, 2017).°)
C. Ad hoc judicial second-guessing of interest rates
would limit the supply of credit.
As this Court has recognized, all businesses need certainty to
operate: ‘“faln undefined standard of what is ‘unfair’ fails to give
businesses adequate guidelines as to what conduct may be challenged and
thus enjoined and may sanction arbitrary or unpredictable decisions about
what is fair or unfair.” (Cel-Tech Communications, Inc. v. Los Angeles
Cellular Telephone Co.(1999) 20 Cal.4th 163, 185.) Indeed, the Court has
noted that vague standards “may even lead to the enjoining of
procompetitive conduct and thereby undermine consumer protection.”
(Ibid. (emphasis in original).)
Lenders are no exception. They rely on an underwriting process to
evaluate all of the risks of making loans. Lenders look to the information
regarding the borrower, including credit scores and income,to try to predict
the likelihood that the borrower will default on the loan. This evaluation
determines whether the lender makesthe loan at all and if so, the price of
the loan.
' Availableat
(as of Feb. 4,
2018).
17
After-the-fact judicial review injects an unknownrisk that lenders
cannot anticipate. Under Petitioners’ theory, lenders could face suits long
after they have approved loans and disbursed the proceeds, even for loans
for less than $2,500 at interest rates at or below the caps specified in the
CFL. As discussed below, for example, payday loans regulated under
California law may well carry APRs that exceed the interest rates at issue
here, (See, infra, at pp. 19-20.)
Lenders cannot predict and therefore cannot price for the risk of
these post-loan judicial determinations—as well as the costs oflitigating
them, even if the lenderis ultimately successful. Concern that courts could
reduce rates or nullify these loans after-the-fact will create uncertainty.
This is especially the case here given that the majority of loans over $2,500
are made at rates above the rate Petitioners seek to impose through their
lawsuit. (DBO 2016 Report, supra, at p. 16.) The possibility of litigation
brought by each individual borrower long after the loan was made and the
enormous costs imposed by this kind oflitigation without any ability to
predict how
a
court will rule will increase costs enormously.
This uncertainty would: shrink consumers’ access to credit—
precisely the opposite of the Legislature’s stated goal.
Il LIMITING ACCESS TO THIS TYPE OF CREDIT
WOULD HARM CONSUMERS.
A. Subprime consumer loans make credit available to
those who might not otherwise be able to borrow.
The record in this case is replete with evidence that subprime
borrowers rely on the challenged loans because they lack alternatives.
(CashCall Br. p. 11.) Class memberstestified about their poor credit
histories, including defaults and bankruptcies, which limited their abilities
18
to get other types of loans. (/d. at p. 16.) The average class member’s
FICO score was less than 600, far below the national average of 700.
Indeed, approximately 30 percent of the nation’s population has a FICO
score below 650. (FICO Blog, U.S. Average FICO Score Hits 700: A
Milestone for Consumers (July 10, 2017) [table showing percentages of the
population by range of FICO scores as of April 2017}.'')
Banks typically do not offer loans to borrowers with these kinds of
credit histories. (Cf. 1-SER-54 [Petitioners’ expert’s recognition that “i]t
is reasonable to assume that [CashCall’s prospective borrowers] may be
under some type offinancial stress with limited options for traditional
loans”].) Respondent and amici’s members fill this gap by providing
access to credit for these borrowers. To do so, however, they must
compensate for the additional risk. Some providers, such as pawnshops,
offset the risk by using property as collateral. If a borrower cannot or
chooses not to offset the risk by offering this type of collateral, the lender
must offset the risk of default with higher interest rates.
This is the case for the loans at issue here and for other types of
loans, such payday loans, which are expressly authorized and regulated
under California’s Deferred Deposit Transaction Law (Fin. Code, § 23000
et seq.). Notably, that law authorizes lenders to charge rates well above
100 percent: Payday lenders may issue loans for up to $300 for a
maximum term of 31 days and may charge fees of up to 15 percent of the
face amount of the check. (Jd. §§ 23035, 23036.) When converted to an
annual percentage rate, the interest on these loans can range from 180 to
1] Available at (as of Feb.4,
2018).
19
390 percent.” According to DBO, the average annual percentage rate for
payday loans issued in 2016 was 372 percent. (DBO, Summary Report:
California Deferred Deposit Transaction Law—Annual Report and Industry
Survey (2016), p. 7.3)
The Legislature’s recent and ongoing experiments with various Pilot
Programs for small-dollar loans underscore consumer demand for these
products. The current Pilot Program for Increased Access to Responsible
Small Dollar Loans permits certain lenders to charge higher interest rates
for loans in the $300 to $2,499 range. (See DBO,Report of Activity Under
the Pilot Program for Responsible Small Dollar Loans (Jan. 1, 2015 — Dec.
31, 2016), p. 1 (hereafter DBO Pilot Program Report)"; and see Fin. Code,
§ 22365 [authorizing the program].) The Legislature recognized in
enacting this program that “consumer demand for responsible installment
loans in principal amountsofat least three hundred dollars ($300) butless
'? Federal regulations explain that APR is calculated by multiplying
each period rate by the numberofperiods in a year. (12 C.F.R.
§ 1026.14(b).) Thus, if the term of the payday loan is one month, the APR
is 180 percent (15 percent multiplied by 12). If the term of the loan is two
weeks, the APR is 390 percent (15 percent multiplied by 26).
'3 Available at
(as of
Feb. 4, 2018).
In other contexts, as with pawnbrokers, the lender uses personal
property as collateral against the loan; if the loan is not paid, the lender can
seize the property. (See Fin. Code, § 21000 et seq. [regulations governing
pawnbrokers].)
"4 Available at
(as of Feb. 4, 2018).
20
than two thousand five hundred dollars ($2,500) exceeds the supply of
these loans.” (Fin. Code, § 22365, subd. (b).) The enactment of this Pilot
Program was not the State’s first attempt to fix the problem. As DBO
explains, an earlier law enacted in 2010 was similarly designed to improve
credit access in this market. (DBO Pilot Program Report, supra, at p. 1.)
But “[a] stubbornly low lender participation rate led to [that program’s]
demise.” (Ubid.)
In other words, the existing interest rate caps were limiting the
supply of credit. Petitioners’ attempt to impose judicial oversight of
interest rates on loans above $2,500 would havethe sameeffect.
B. The risk of a judicially imposed cap on interest rates
would force consumersinto worseoptions.
The decrease in access to the loans at issue that will result if
Petitioners’ position were adopted will not limit the demand for them.
Consumers with poor credit histories—like anyone else—may need to
borrow money, including to pay bills, maintain their cars, and deal with
various types of emergency expenses. (DBO Pilot Program Report, supra,
at p. 10.) According to the Federal Reserve,“[nJearly half of adults areill-
prepared for a financial disruption and would struggle to cover emergency
expenses shouldthey arise.” (Board of Governors of the Federal Reserve
System, Report on Economic Well-Being of U.S. Households in 2015 (May
2016) p. 1 (“Federal Reserve Report”). '°) According to the Federal
Reserve’s recent study, 46 percent of adults say they would not have the
means to cover an emergency expense of $400. (Ud.) More than twenty
percent of survey respondents experienced a “major unexpected medical
'S Available at (as for Feb. 4, 2018).
2)
3
expense that they had to pay out of pocket in the prior year” and forty-six
percent of respondents who had major medical expenses currently owe debt
from those expenses. (/d.)
The reduction in access to needed credit that would be caused by
adoption of Petitioners’ position would only exacerbate an insufficient
supply of credit. Just under half of the consumers who participated in the
Federal Reserve’s survey indicated a desire for additional credit in the
previous year. Of those, forty percent reported actual or perceived
difficulty in obtaining credit, based either on a denial, being offered less
credit than requested, or a perception that any application would be denied.
(Federal Reserve Report, supra, at p. 29.) And the rate of actual or
expected denial was “substantially higher for lower-income [survey]
respondents.” (/d.)
A consumer in need of a short- or medium-term loan will have to
explore other options if cash installment loans become unavailable, such as
overdrawing her checking account, paying bills late (or notat all), or even
seeking illegal sources of credit. There is little reason to believe that these
alternative options will offer more favorable terms; if they did, borrowers
would have chosen those options rather than the loans offered by
Respondent at issue here. For example, paying the bills late can result in
late charges, service interruption, or reconnection fees. Overdrawing a
checking account can result in account closure, fees from merchants for
bounced checks (known as “NSF fees”), or a fee from the bank for
overdraft protection. These NSF and overdraft fees can amount to
hundredsof dollars per year for consumers, with average overdraft fees that
would constitute an APR of 17,000 percent had the consumer borrowed the
funds. (Consumer Financial Protection Bureau, CFPB Study of Overdraft
22
Programs (June 2013) p. 23'°: and see CFPB Finds Small Debit Purchases
Lead to Expensive Overdraft Charges (July 31, 2014).'7)
Although Petitioners claim the challenged loans are unconscionable,
they ignore that if these loans were not available, consumers would have no
choice but to look elsewhere to meet their borrowing needs. Petitioners
present no evidence that those alternatives would put consumersin a better
position than would the loans at issue. That these consumers chose these
loans indicates otherwise.
Analogously, a number of scholars and researchers have
demonstrated that bans or prohibitive restrictions on payday loans have
caused consumers to resort to less favorable options. For example, in a
recent study, researchers documented the effects of payday loan bans across
several jurisdictions and concluded that these bansresulted in “increas[ing]
the number of consumers who borrow from pawnshops.” (Bhutta et al.,
Consumer Borrowing After Payday Loan Bans (2016) 59 J. L. & Econ.
225, 227 (hereafter Bhutta).) This study tracked borrowing patterns across
four jurisdictions that banned payday loans. Researchers found that in
these jurisdictions, use of pawnshops increased by 60 percent as compared
16 Available at
(as of Feb. 4, 2018).
'7 Available at (as of Feb. 4, 2018).
23
to states in which paydayloans are legal. (/d. at p. 246.)'8 The researchers
found that, on average, pawnshops charge an APR of approximately 250
percent. (/d. at p. 229.) In addition, this form of lending is available only
to consumers whocan put up collateral for the loan.
The researchers also found that in states where payday loans were
restricted, there was a statistically significant increase in the number of
consumers whose checking accounts were closed involuntarily—providing
evidence that these consumers excessively overdrew their accounts or
caused checks to bounce. (/d. at p. 247.) By contrast, the study found “no
evidence that payday loan bansresult in substitution toward traditional (and
generally cheaper) forms of credit,” such as greater usages of credit cards or
bank loans. (/d. at p. 250.)
Earlier studies have similarly concluded that bans on payday loans
can harm borrowers. (E.g., Morgan & Strain, Payday Holiday: How
Households Fare after Payday Credit Bans (Nov. 2007; revised Feb. 2008)
Fed. Reserve Bank of N.Y. Staff Reports, No. 309, pp. 20-22 [examining
data from North Carolina and Georgia after payday loans were banned and
concluding that rates of bounced checks increasedin thosestatesrelative to
other states]; Zinman, Restricting consumer credit access: Household
survey evidence on effects around Oregon rate cap (2010) 34 J. Banking &
Finance 546, 547 [studying data from Oregon after it restricted payday
lending and concluding that “borrowers responded by shifting into
'® Notably, California law expressly exempts loans for $2,500 or
more from rate caps imposed on pawnbrokers. (Fin. Code, § 21051.)
Additionally, the division of the Financial Code regulating pawnbrokers
does not have an unconscionability provision. As such, a ruling authorizing
judicial challenges to interest rates on installment loans could increase the
market for high-dollar pawnloans.
24
incomplete and plausibly inferior substitutes,” and that “[mJost substitution
seem[ed] to occur through checking account overdrafts of various types
and/orlate bills’’].)
Although payday loans differ from the type of installment loans at
issue in this case, the evidence from these studies is instructive. These
studies support the common-sense conclusion that when borrowers’ options
for obtaining credit are restricted, they may be forced to turn to alternative
types of credit that they would not otherwise have chosen. Indeed, because
there has been “hardly any systematic study of small-dollar installment
loans,” data from contexts involving other types of loans is especially
valuable. (Beales & Goel, Small-Dollar Installment Loans: An Empirical
Analysis (June 5, 2015) Navigant Economics,p. 1.)
In short, reducing access to one type of loan may cause consumers to
“turn to other forms of high-interest credit.” (Bhutta, supra, at pp. 247-
248.) There is every reason to believe that these alternative forms ofcredit
would make consumers worse off than the installment loans at issue here.
Il. REGULATING INTEREST RATES IS AN INHERENTLY
LEGISLATIVE TASK
This Court has long madeclearthatit “has neither the powernor the
duty to determine the wisdom of any economic policy.” (Max Factor &
Co. v. Kunsman (1936) 5 Cal.2d 446, 454; and see Allied Properties v.
Dept. ofAlcoholic Beverage Control (1959) 53 Cal.2d 141, 146 [“It is not
our province to weigh the desirability of the social or economic policy
underlying the statute or to question its wisdom; they are purely legislative
'9 Available at (as of
Feb.4, 2018).
25
matters.”].) That is especially so where the legislative and executive bodies
of the State have already acted to regulate an industry. Moreover, the
policics at issue here concern a particular area of expertise, and any further
regulations would inevitably require the decision-maker to weigh costs and
benefits. The judiciary should not displace the political branches’ authority
by assumingthis task.
A. The State’s legislative and executive bodies already
comprehensively regulate interest rates and other
aspects of consumerlending.
The California Legislature has enacted an extensive set of laws
governing consumerloans, including the types of loans made inthis case.
(See, supra, at pp. 16.) In deciding to exempt loans of $2,500 or more from
interest rate caps, the Legislature and the State’s executive authorities
engaged in a considered policy deliberation and determined that interest
rates for loans above this amount should be determined by market forces.
(See generally CashCall Br. pp. 26-31.) The Senate enacted the 1985
legislation removing the interest caps on loans for between $2,500 to
$4,999 by a vote of 37-0, and the bill was subsequently passed by the
Assembly through a consent vote. (CashCall Mot. for Judicial Notice
(hereafter MJN) Ex. 5.)””
© California has not been alone in determining that loans exceeding
certain dollar amounts should not be subject to interest rate caps. (See Ala.
Code § 8-8-5 [no interest rate caps for loans of $2,000 or more]; S.C. Code
Ann.§ 37-3-201(2)(b) [same, for loans exceeding $600 if issued by a
supervised lender]; Va. Code Ann. § 6.2-1520 [same, for loans exceeding
$2,500].) Many other States do not regulate interest rates for consumer
loansat all. (See, e.g., Idaho Code § 28-42-201; Nev. Rev. Stat. Ann.
§ 675.010 et seq. [provisions governing installment loans]; Utah Code Ann.
§ 70c-2-101; and see Kan. Stat. Ann. § 16a-2-401 [norestrictions for open-
end credit loans]; Wis. Stat. § 422.202(2m) [same].)
26
In evaluating the impact of this legislation, DBO concluded that,
absent the rate caps, interest rates would “be set by the market place.”
(MIJN Ex.4, at p. 1; and see MJN Ex.3, at p. 1 [bill’s sponsor argued that
“flexible rates would foster competition within the industry”].) DBO
recognized that “[t]he major argument in favor of”this legislation was that
“rate regulation provides very little consumer protection,” including by
potentially causing lenders simply to “lend money at the maximum
allowable rate irrespective of the creditworthiness of the buyer.” (MIJN Ex.
4, at p. 1.) DBOfurther noted that it would “monitor the interest rates on
loans above $2,500 to determine whether these rates are ‘competitive’
through the mechanism of the annual report required to be filed by licensed
lenders.” ([bid.)
True to that statement, DBO continues to monitor this industry
closely. It publishes annual reports with broad sets of data about the
lending industry and the interest rates charged for loans for $2,500 or more,
andit frequently pursues enforcement actions against lenders, (See, supra,
at pp. 15-16.) The Legislature, too, remainsactive in this area. Starting in
2010, it implemented an experimental pilot program to address supply of
credit that is not meeting consumer demand. The pilot program legislation
has been amendedthree times since its enactment in 2010, indicating that
the Legislature is actively monitoring and seeking to make legislative
improvements in this area. (Sen. Bill. No. 896, Ch. Law 190 (2014); Sen.
Bill No. 235, Ch. Law 505 (2015); Sen. Bill No. 984, Ch. Law 480 (2016).)
Likewise, the statute authorizing the current pilot program expressly directs
DBOto publish a detailed annual report about its operation along with any
recommendations for improving the program. (Fin. Code, § 22380.)
The Legislature also continues to assess whether further rate caps
should be imposed: just last year, a State Assembly member introduced a
27
bill that would impose caps on interest rates for loans between $2,500 to
$10,000. (Assem. Bill No. 1109 (2017-2018 Reg. Sess.)*!; and see
Anderson, California bill seeks to limit interest rates on auto title, finance
loans, Sacramento Bus. J. (Mar. 22, 2017).”*) Against this backdrop, the
judiciary should not intervene to impose its own rate caps on the basis of
the record in one case.
B. Imposing caps on interest rates requires decision-
makers to weigh competing policy considerations—a
task uniquely suited to the Legislature.
This case—including its voluminous record and competing expert
reports—illustrates why the Legislature is best suited to make the complex
policy judgments at issue. Decisions about whether to regulate interest
rates at all and if so, how best to do it, requires an understanding of myriad,
inter-related factors such as the state of the credit market; the needs of
borrowers; the degree of competition amonglenders; and lenders’ operating
costs and business models. Each of these judgments is informed by
empirical data, expert testimony, and debate among policymakers. This
Court has recognized that the judicial process is not suited to making these
kinds of judgments, warning against adjudication of issues where “[t]he
trial would devolve into a battle of economic studies and experts, with each
side arguing from statistical and other evidence in support ofits favorite
*! The text ofthebill is available at
(as of Feb. 4, 2018).
2 Availableat
(as of Feb. 4, 2018).
28
criteria.” (Harris vy. Capital Growth Investors XIV (1991) 52 Cal.3d 1142,
1166.)
Most importantly, decision-makers setting interest rates must weigh
competing policy priorities and even values. The aim of allowing
competition and free enterprise must be weighed against concerns about
fairness to borrowers. The eagerness to redress a perceived wrong must be
weighed against the risk of creating unintended consequences. The value
of allowing consumers to make their own choices must be weighed against
the concern that consumers will make bad decisions. In making these
assessments, decision-makers must also choose which types of evidence
and expertise—be it psychological, economic, empirical, statistical, or
merely anecdotal—should be accorded the most weight. (E.g., 1-SER-46-
64 [expert report by psychologist in support of Petitioners].)
These types of value choices are quintessentially legislative tasks.
Petitioners may well disagree with amici’s predictions that an
unconscionability ruling in this case would shrink access to credit and
ultimately harm consumers. Indeed, other amici supporting Petitioners may
offer their own studies purporting to show that these types of regulations
make consumers better off. But those types of ducling policy contentions
are precisely the types of issues that should be resolved by the branches of
governmentresponsible for making policy choices. This Court should not
assume such arole.
29
CONCLUSION
For the reasons stated above, this Court should answer the Ninth
Circuit’s certified question in the negative.
Dated: February 5, 2018 Respectfully submitted,
jtdettio
NANCY R.ELLEGE
MORRISON & FOERSTER LLP
Counselfor Amici Curiae
California Financial Service
Providers Association, Financial
Service Centers ofAmerica,
Community Financial Services
Association ofAmerica, and Online
Lenders Alliance
30
CERTIFICATE OF COMPLIANCE
Pursuant to rule 8.204(c) of the California Rules of Court and in
reliance on the word count of the computer program used to prepare this
brief, counsel certifies that this brief was produced using a 13-point font
and contains 5,717 words, excluding those exempted under rule
8.204(c)(3).
Dated February 5, 2018 s/ hileZZ
Nanéy R. Thomas”
dc-9 14607
31
PROOF OF SERVICE
I declare that I am employed with the law firm of Morrison & Foerster LLP, whose
address is 707 Wilshire Boulevard, Suite 6000, Los Angeles, California 90017-3543. I am nota
party to the within causc, and I am overthe age of eighteen years.
I further declare that on February 5, 2018, | served a copyof:
AMICUS CURIAE BRIEF OF CALIFORNIA FINANCIAL SERVICE
PROVIDERS ASSOCIATION, FINANCIAL SERVICE CENTERS OF
AMERICA, COMMUNITYFINANCIAL SERVICES ASSOCIATION OF
AMERICA, AND ONLINE LENDERS ALLIANCE IN SUPPORT OF
RESPONDENT
BY OVERNIGHT DELIVERY[Code Civ. Proc sec. 1013(c)] by placing a
true copy thereof enclosed in a sealed envelope with delivery fees provided
for, addressed as follows, for collection by UPS, at 707 Wilshire Boulevard,
Suite 6000, Los Angeles, California, 90017 in accordance with Morrison &
Foerster LLP’s ordinary businesspractices.
I am readily familiar with Morrison & Foerster LLP’s practice for collection
and processing of correspondence for overnight delivery and knowthatin the
ordinary course of Morrison & Foerster LLP’s business practice the document
described above will be deposited in a box or other facility regularly
maintained by UPSordelivered to an authorized courier or driver authorized
by UPSto receive documents on the samedate that it is placed at Morrison &
Foerster LLP for collection.
Arthur D, Levy
Law Office of Arthur D. Levy
1814 Franklin Street, Suite 1040
Oakland, CA 94612
arthur@yesquire.com
Damon M. Connolly
Law Offices of Damon M. Connolly
1000 4” Street, #600
San Rafael, CA 94901
damon@damonconnollylaw.com
Monique Olivier
Duckworth Peters Lebowitz Olivier LLP
100 Bush Street, Suite 1800
San Francisco, CA 94104-3920
monique@dplolaw.com
Attorneys for Plaintiffs and Appellants
EDUARDO DE LA TORRE and
LORI SAYSOURIVONG
Attorneysfor Plaintiffs and Appellants
EDUARDO DE LA TORRE and
LORI SAYSOURIVONG
Attorneys for Plaintiffs and Appellants
EDUARDODE LA TORRE and
LORI SAYSOURIVONG
James C. Sturdevant
The Sturdevant Law Firm
4040 Civic Center Drive, Suite 200
San Rafael, CA 94903-4187
jsturdevant@sturdevantlaw.com
Jessica L. Riggin
Rukin Hyland LLP
1939 Harrison Street, Suite 290
Oakland, CA 94612-4713
jriggin@rukinhyland.com
Steven M. Tindall
Andre M. Mura
Gibbs Law Group LLP
505 14" Street, Suite 1110
Oakland, CA 94612-1406
smt@classlawgroup.com
amm(@classlawgroup.com
Beth E. Terrell
Terrell Marshall Law Group
936 North 34" Street, Suite 300
Seattle, WA 98103-8869
beth@terrellmarshall.com
Brad W.Seiling
Donald R. Brown
Joanna 8. McCallum
Manatt, Phelps & Phillips, LLP
11355 West Olympic Boulevard
Los Angeles, CA 90064-1614
bseitling@manatt.com
dbrown@manatt.com
jmecallum@manatt.com
Center for Responsible Lending
1970 Broadway, Suite 350
Oakland, CA 94612
Ted Mermin
3130 Shattuck Avenue
Berkeley, CA 94705
Michael J. Quirk
Williams Cuker Berezofsky, LLC
1515 Market Street, Suite 1300
Philadelphia, PA 19102
Michael Reynolds
Deputy Attorney General
California Department ofJustice
300 South Spring Street, Suite 1702
Los Angeles, CA. 90013-1256
Attorneysfor Plaintiffs and Appellants
EDUARDODE LA TORRE and
LORI SAYSOURIVONG
Attorneysfor Plaintiffs and Appellants
EDUARDO DE LA TORRE and
LORI SAYSOURIVONG
Attorneysfor Plaintiffs and Appellants
EDUARDO DE LA TORRE and
LORI SAYSOURIVONG
Attorneysfor Plaintiffs and Appellants
EDUARDO DE LA TORRE and
LORI SAYSOURIVONG
Attorneysfor Defendant, Appellee, and
Cross-Appellant
CashCall, Inc.
Clerk, U.S. Court of Appeals for the
Ninth Circuit
95 Seventh Street
San Francisco, CA 94103
Clerk, U.S. District Court for the
Northern District of California
450 Golden Gate Avenue
San Francisco, CA 94102
I declare under penalty of perjury under the laws ofthe State of California that the
foregoingis true and correct.
Executed at Los Angeles, California, February 5, 2018.
tetI
al
Alicia Vargas
Kein
/@3gnature) Sy
