2023

California Department of
Financial Protection and Innovation

Annual Report of Payday Lending Activity Under

the California Deferred Deposit Transaction Law
Report Required by Financial Code Section 23026
Tomiquia Moss, Secretary
Business, Consumer Services and Housing Agency

Clothilde V. Hewlett, Commissioner

Department of Financial Protection and Innovation

Gregory Young, Senior Deputy Commissioner

Division of Corporations and Financial Institutions

Mona Elsheikh, Deputy Commissioner

Financial Services

Published September 2024

 TABLE OF CONTENTS

Executive Summary ....................................................................................................... 3

Part I: Consolidated Annual Report ................................................................................ 5
Background.................................................................................................................... 5
CDDTL Historical Data – Transactions ....................................................................... 6
CDDTL Historical Data - Returned Checks ................................................................. 8
CDDTL Historical Data – Checks Charged Off ......................................................... 10
CDDTL Historical Data – Licensing .......................................................................... 11
Part II: Consolidated Industry Survey ........................................................................... 12
Background.................................................................................................................. 12
Payday Loan Transaction Volumes Per Customer ................................................... 13
Customer Age .......................................................................................................... 14
Customer Income ..................................................................................................... 16
Internet Transactions ................................................................................................ 17
Lead Generators ...................................................................................................... 18
Disbursements to Customers ................................................................................... 20
Payments from Customers ....................................................................................... 22
Payment Plans......................................................................................................... 24
Collections ................................................................................................................ 25
Fees ......................................................................................................................... 28
Subsequent Customers ............................................................................................ 29
Returned Checks...................................................................................................... 32
Customers Receiving Government Assistance ......................................................... 34
Dispute Arbitration .................................................................................................... 35
Covered Borrowers .................................................................................................. 36
 EXECUTIVE SUMMARY

The Department of Financial Protection and Innovation licenses and regulates deferred deposit
originators, better known as payday lenders, pursuant to the California Deferred Deposit Transaction
Law (CDDTL).

In a payday loan transaction, the consumer provides the lender a personal check for $300 or less.
Also called “cash advances” or “deferred deposits,” the lender gives the consumer the money, minus
an agreed upon fee. By law, the fee cannot exceed 15 percent of the amount of the personal check
and the lender then defers depositing the consumer’s check for a specific period, not to exceed 31
days. The Department started regulating payday loans in 2005 to provide greater oversight and
guarantee that consumers have the disclosures necessary to make informed decisions.

The annual report and survey data in this report is unaudited and covers licensees’ activities in
calendar year 2023. The report also provides historical data back to 2014.

Key Findings
• California’s payday lenders made more than 5.6 million loans in 2023, worth more than $1.59
billion. In 2022, California’s payday lenders made more than 5.3 million loans worth more than
$1.51 billion. These transactions represent an increase of 5.7 percent from 2022 totals.

• In 2023, more than 885,000 individual customers took out payday loans, a 1.6 percent
decrease from the 2022 total. In 2022, more than 900,000 individual customers took out
payday loans.

• Nearly 61.3 percent of licensees served customers who received government

assistance.

• Subsequent loans by the same borrower accounted for 70 percent of the payday loans in
2023 and 76.5 percent of the aggregate dollar amount.

• Of subsequent payday loans by the same borrower, 27.7 percent were made the same day
the previous transaction ended.

• Another 17.6 percent of payday loans were made one to seven days after the previous
loan was repaid.

• Payday lenders charged $236.9 million in fees on payday loans in 2023. Of that total, 73.6
percent – or $174.3 million – came from customers who made seven or more
transactions during the year.

• In 2023, 32 percent of payday loan customers had average annual incomes of $30,000 or
less, and 18 percent had average annual incomes of $20,000 or less.
California Department of Financial Protection and Innovation 3
 • The number of payday loan customers referred by lead generators decreased 21 percent,
from 117,559 in 2022 to 92,894 in 2023.

• Nearly 24 percent of licensees made payday loans on the internet during 2023. Online
payday loans accounted for 51.2 percent of all payday loans.

• Approximately 56.5 percent of customers (500,554) took out payday loans over the
internet.

• In 2023, 23.3 percent consumers took out single payday loans, while 25.6 percent consumers
took out 10 or more payday loans.

• The use of cash to disburse funds to and receive payments from customers continued to
decline in 2022. Measured in dollar amounts, cash disbursements decreased from 46.5
percent in 2022 to 34.4 percent in 2023.

• Other forms of disbursements, including wire transfers, instant funding, Zelle, and debit cards,
climbed to 41.4 percent from 35.6 percent in 2022. Twenty-five percent of customers’
payments were made with cash, down from 29.1 percent in 2022.

• Electronic transfers accounted for 23.7 percent of customers’ payments, compared to 25.3
percent in 2022.

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 PART I: CONSOLIDATED ANNUAL REPORT
BACKGROUND

In this report, the Department of Financial Protection and Innovation (DFPI) has compiled data
submitted by licensed deferred deposit originators, better known as payday lenders, under the
California Deferred Deposit Transaction Law (CDDTL). Financial Code section 23026 requires
licensees to file annual reports that provide information related to their lending activities under the
program with the DFPI Commissioner.

This report contains unaudited data provided by licensees for the calendar year ending December 31,
2023.
As of December 31, 2023, the DFPI licensed 96 payday lenders. Of those, 93 filed required annual
reports in time to be included in this report, and three surrendered their licenses after January 1,
2024.
Due to rounding, numbers presented throughout this report may not add up precisely to the totals
provided, and percentages may not precisely reflect the absolute figures.
This report and prior years’ reports can be found on the DFPI’s website at
dfpi.ca.gov/publications/payday-lenders-publications.

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CDDTL Historical Data – Transactions

In 2023, the total dollar amount of payday loans increased by 5.7 percent, while the total number of
payday loans also increased 5.7 percent. The total number of individual customers who obtained
payday loans decreased 1.64 percent compared to 2022. The average number of payday loans per
customer has only slightly decreased from 6.82 in 2014 to 6.4 in 2023.

Table 1: Total Dollar Amount and Number of Transactions

Total number of individual

Total dollar amount of Total number of payday
Year customers who obtained
payday loans loans
payday loans**

2023 $1,591,710,887 5,664,584 885,573

2022* $1,506,009,181 5,359,132 900,334
2021* $1,263,486,126 4,526,338 790,143
2020* $1,683,670,749 6,084,434 1,128,211
2019* $2,819,552,891 10,181,247 1,612,593
2018* $2,815,483,777 10,233,292 1,622,021
2017* $2,940,236,402 10,734,226 1,688,719
2016* $3,140,937,922 11,502,397 1,796,515
2015 $4,170,267,951 12,261,885 1,885,934
2014 $3,376,447,239 12,407,422 1,818,524

* Variances from data published in the annual report due to late filings by licensees.
** Repeat customers were counted once.

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CDDTL Historical Data - Transactions (continued)

The average payday loan dollar amount was $250 in 2023. The average annual percentage rate
(APR) for payday loans was 367 percent in 2023.

Table 2: Transaction Analysis

*Average dollar amount of **Average annual percentage Average number of days of

Year
payday loans rate (APR) payday loans

2023 $250 367% 16

2022 $251 364% 16
2021 $245 353% 16
2020 $247 361% 16
2019 $250 369% 17
2018 $250 376% 17
2017 $250 377% 17
2016 $251 372% 17
2015 $237 366% 17
2014 $235 361% 16

* Maximum transaction amount, per statute, is $300.

** APR is calculated using the average method, in which all APRs reported are divided by the number of licensees.

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CDDTL Historical Data - Returned Checks

From 2022 to 2023, the total number of returned checks in payday loan transactions increased by
3.41 percent. Returned checks as a share of total payday loans decreased to 10.09 percent in 2023.
E

Table 3: Returned Checks: Total Number and Dollar Amount

Total number of returned Total number as Total dollar amount Total dollar amount as
Year
checks percentage of returned checks percentage

2023 571,777 10.09% $160,947,989 10.11%

2022* 552,902 10.32% $161,518,725 10.72%
2021* 399,094 8.82% $114,449,735 9.05%
2020* 338,888 5.57% $90,354,373 5.36%
2019* 654,354 6.43% $176,818,609 6.27%
2018* 646,811 6.32% $177,150,764 6.29%
2017* 660,351 6.15% $178,500,307 6.07%
2016* 773,368 6.72% $193,301,210 6.15%
2015 780,856 6.37% $212,767,330 5.10%
2014 725,170 5.84% $196,652,680 5.82%

* Variances from data published in the annual report due to late filings by licensees.

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CDDTL Historical Data - Returned Checks (Continued)

From 2022 to 2023, the total dollar amount of returned checks recovered, or paid by customers, in
payday loan transactions increased 8.3 percent, to approximately $110.6 million. Recovered returned
checks as a share of total payday loans in 2023 was 7.35 percent: the highest rate in the past 10
years.

Table 4: Returned Checks Recovered

Total dollar amount of

Total number of returned Total number as Total dollar amount as
Year returned checks
checks recovered** percentage percentage
recovered**

2023 416,387 7.35% $110,613,279 6.95%

2022* 384,461 7.17% $102,139,777 6.78%
2021* 267,096 5.90% $69,150,595 5.47%
2020* 300,321 4.94% $72,540,932 4.31%
2019* 425,567 4.18% $95,672,481 3.39%
2018* 417,985 4.08% $90,526,804 3.22%
2017* 421,561 3.93% $89,419,679 3.04%
2016* 421,371 3.66% $92,191,739 2.94%
2015 417,957 3.41% $96,878,435 2.32%
2014 399,973 3.22% $93,854,369 2.78%

* Variances from data published in the annual report due to late filings by licensees.
** Includes partial recoveries.

California Department of Financial Protection and Innovation 9

CDDTL Historical Data – Checks Charged Off

From 2022 to 2023, the number and the dollar amount of checks charged off, or payday loans
unlikely to be collected, increased by 5.85 and 4.2 percent, respectively. The number of charged-off
checks as a share of total payday loans in 2023 remained unchanged from 2022 at 2.14 percent.

Table 5: Checks Charged Off

Total dollar
Total number Total Total dollar
amount of
Year of checks number as amount as
checks
charged off** percentage percentage
charged off**
2023 121,503 2.14% $30,890,770 1.94%
2022* 114,789 2.14% $29,645,942 1.97%
2021* 94,335 2.08% $24,340,705 1.93%
2020* 158,285 2.60% $39,725,782 2.36%
2019* 265,258 2.61% $66,483,174 2.36%
2018* 264,946 2.59% $66,514,684 2.36%
2017* 343,865 3.20% $82,592,712 2.81%
2016* 548,001 4.76% $143,439,201 4.57%
2015 380,925 3.11% $92,891,127 2.23%
2014 376,728 3.04% $99,586,657 2.95%
* Variances from data published in the annual report due to late filings by licensees.
** Includes partial balances.

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CDDTL Historical Data – Licensing

Table 6 shows a decline in the number of licensed locations since 2014. From 2022 to 2023, the
number dropped by 88, or 12.24 percent. From 2014 to 2023, the number of licensed locations
dropped by 1,383, or 68.7 percent.
Table 6: Licensed Locations

Year Number

2023 631
2022 719
2021 834
2020 1,121
2019 1,551
2018 1,645
2017 1,705
2016 1,854
2015 1,969
2014 2,014

In Table 7, the “long form application” refers to the first application for a CDDTL license. The “short
form application” refers to a license for an additional business location. Applications are subject to
abandonment if a deficiency is not corrected within 90 days of notification. Applications can be
withdrawn at the request of the applicant.

Table 7: Applications Filed

Year Long Form Applications Filed Short Form Applications Filed Total Applications Filed
(License for the First (License for an Additional
Location) Business Location)
2023 4 21 25
2022 9 5 14
2021 7 2 9
2020 6 12 18
2019 11 6 17
2018 20 61 81
2017 8 20 28
2016 17 51 68
2015 19 29 48
2014 35 125 160

California Department of Financial Protection and Innovation 11

 PART II: CONSOLIDATED INDUSTRY SURVEY
BACKGROUND

In January 2024, the DFPI provided the California Deferred Deposit Transaction Law – 2023 Industry
Survey to all licensed payday lenders. The DFPI conducts this survey pursuant to Financial Code
section 23015.
The survey allows the Department to assess the financial health and compliance practices of
California’s licensed payday lenders and potential consumer risks. The data collected on licensees’
activities in calendar year 2023 related to the following:
• Volume of transactions per customer • Fees
• Customer ages and income • Subsequent transactions by the same
• Internet transactions borrower
• Lead generators • Returned checks
• Disbursements to customers • Transactions with customers who
• Payments from customers receive government assistance
• Payment plans • Dispute arbitration
• Collections • Covered borrowers

Some data provided in the survey results may not exactly match the data in Part I of this report.

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Payday Loan Transaction Volumes Per Customer
Questions one through 10 of the survey asked licensees to report the number of customers who
obtained a specified number of transactions during 2023. Chart 1 provides the aggregated response
data for each question.

Chart 1: Total Number of Customers by Number of Transactions

Source: Survey questions 1-10

226,810
206,053

102,979

76,860
62,303
55,564
47,948
39,201 35,279 32,576

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Customer Age
Chart 2: Number of Customers by Customers' Age
Source: Survey questions 12-17

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Customer Age (continued)
Chart 3: Number of Transactions by Customers' Age
Source: Survey questions 19-24

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Customer Income
Chart 4: Average Annual Income
Source: Survey questions 26-35

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Internet Transactions

Chart 5: Percentage of Payday Lenders Conducting Transactions on Internet

Source: Survey question 37

Table 8: Internet Transaction Volumes and Amounts

Source: Survey questions 38 – 40

2023 2022 2021 2020

Number of Customers 500,554 497,777 416,090 460,458

Number of Transactions 2,898,280 2,607,942 2,047,889 2,066,113

Transaction Amounts $786,753,637 $709,474,125 $549,240,837 $564,290,701

California Department of Financial Protection and Innovation 17

 Lead Generators

The number of payday loan customers referred by lead generators decreased from 117,559
in 2022 to 92,894 in 2023.

Chart 6: Number of Payday Lenders Using Lead Generators

Source: Survey question 41

Table 9: Lead Generator Fees

Source: Survey questions 43 and 44

2023 2022 2021 2020

Fees Paid to Lead
$6,033,079 $8,940,816 $4,706,867 $4,832,997
Generators
Number of
Customers Who
Made Payday 92,894 117,559 109,486 98,555
Loans that Resulted
from Leads

California Department of Financial Protection and Innovation 18

 Lead Generators (continued)

Chart 7: Percentage of Qualified Leads Resulting in Transactions

Source: Survey question 43 & Annual Report question 3

Customers resulted from qualified leads

Customers not resulted from qualified leads

The number of customers resulted from qualified leads decreased to approximately

10 percent in 2023 from 13 percent in 2022.

California Department of Financial Protection and Innovation 19

Disbursements to Customers

Chart 8: Number of Disbursements to Customers

Source: Survey question 54

Of reported disbursements, cash represented 34.31 percent; electronic ACH, 23.57

percent; paper check, 0.75 percent; and other, 41.37 percent.

The “other” category includes wire transfer, instant funding, Zelle, and debit cards.

California Department of Financial Protection and Innovation 20

Disbursements to Customers (continued)

Chart 9: Dollar Amount of Disbursements to Customers

Source: Survey question 55

Of reported disbursements, cash represented 34.35 percent; electronic ACH, 23.63

percent; paper check, 0.74 percent; and other, 41.28 percent.

The “other” category includes wire transfer, instant funding, Zelle, and debit cards.

California Department of Financial Protection and Innovation 21

Payments from Customers
Chart 10: Number of Payments from Customers
Source: Survey question 58

Cash accounted for 25.23 percent of customer payments; electronic ACH, 25 percent;
paper check, 2.05 percent; debit card, 16.69 percent; credit card, 14.56 percent; and
other, 16.47 percent.

The “other” category includes money order, MoneyGram, cashier’s check, Zelle, Venmo,
and debit cards.

California Department of Financial Protection and Innovation 22

Payments from Customers (continued)

Chart 11: Amount of Payments from Customers

Source: Survey question 59

Of reported payments, cash represented 25.30 percent; electronic ACH, 23.69 percent;
paper check, 2.29 percent; debit card, 17.11 percent; credit card, 15.04 percent; and
other, 16.56 percent.

The “other” category includes money order, MoneyGram, cashier’s check, Zelle, Venmo,
and debit cards.

California Department of Financial Protection and Innovation 23

Payment Plans

Chart 12: Percentage of Payday Lenders Offering Written Payment Plan

Source: Survey question 61

Table 10: Payment Plan Volumes for Repayment

Source: Survey questions 63 and 64

2023
Total Dollar Amount of Payment Plans Arranged $45,666,581
Total Number of Payment Plans Arranged 230,987

California Department of Financial Protection and Innovation 24

Collections

During calendar year 2023, the period for which data was obtained for this report, the Department
was also expanding its regulation of debt collectors.

The California Consumer Financial Protection Law (CCFPL) (Financial Code sections 90000-90019)
was enacted on September 25, 2020, conferring new authority to the Department to supervise and
regulate “consumer financial products and services.” The CCFPL became effective on January 1,
2021. Debt collectors squarely fall under that definition and are now subject to the Department’s
supervisory jurisdiction. Debt collectors must also comply with the CCFPL’s general prohibition of
unlawful, unfair, deceptive, or abusive acts or practices, which the Department enforces. In addition,
the Debt Collection Licensing Act (Financial Code sections 100000-1000025) was enacted on
September 25, 2020, requiring debt collectors to be licensed by the Department.

Companies engaged in the business of debt collection are required to be licensed as of January 1,
2022, to continue doing business in California. Debt collectors may continue to do business while
their licensing application is pending review by the Department. The Department began issuing
licenses on January 1, 2023, and is currently processing more than 1,000 applications.

Several other laws regulate the conduct of debt collection companies in California, including the
federal Fair Debt Collection Practices Act, California's Rosenthal Fair Debt Collection Practices Act
(Civil Code sections 1788-1788.33), and California’s Fair Debt Buying Practices Act (Civil Code
sections 1788.50-1788.66). The Department can enforce these laws pursuant to the CCFPL, which
provides that the Department can enforce any California or federal “consumer financial law.”

California Department of Financial Protection and Innovation 25

Collections (continued)

Chart 13: Percentage of Licensees with In-House Collections

Source: Survey question 66

A total of 232,128 customers were not in a payment plan and paid in full due to in-house
collections in 2023. Those customers accounted for 849,258 transactions. (Source: Survey
questions 67 and 68)

The total dollar amount of 2023 transactions that were not in a payment plan and paid in full
due to in-house collections was approximately $215 million. (Source: Survey question 69)

California Department of Financial Protection and Innovation 26

 Collections (continued)
Chart 14: Percentage of Licensees That Own Outside Collection Agency
Source: Survey question 70

Chart 15: Percentage of Licensees Associated with Outside Collection Agency

Source: Survey question 71

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Fees

Responsive licensees charged $236.9 million in fees on payday loans originated in 2023. Of that
total, 73.61 percent – or $174.3 million – came from customers who took out seven or more payday
loans during the year.

Chart 16: Payday Loan Transaction Fees per Financial Code section 23036(a)
Source: Survey questions 75-81

California Department of Financial Protection and Innovation 28

 Subsequent Customers

Chart 17: Subsequent Transactions by Same Borrower: Number

Source: Annual Report question 1 and Survey question 89

Number of all payday loans

Number of subsequent transactions by same borrower

Of the 5.6 million payday loans reported for 2023, 70.42 percent were subsequent
transactions by the same borrower.

California Department of Financial Protection and Innovation 29

 Chart 18: Subsequent Transactions by Same Borrower: Dollar Amount
Source: Annual Report question 2 and Survey question 90

Dollar amount of all payday loan transactions

Dollar amount of subsequent transactions by same borrower

Of the $1.59 billion in payday loan transactions reported for 2023, 76.52 percent of the
total dollar amount represented transactions with repeat borrowers.

California Department of Financial Protection and Innovation 30

Subsequent Customers (continued)
Chart 19: Subsequent Transactions by Same Borrowers: Days Between Transactions by
Volume
Source: Survey questions 85 - 88

Of subsequent payday loan transactions, 27.69 percent were made by the same
borrowers on the same day the previous transaction closed; 17.56 percent were made
one to seven days later; 17.09 percent were made eight to 14 days later; and 37.66
percent were made 15 days or more after the previous transaction closed. These
percentages are based on 3.9 million subsequent transactions for which licensees
provided the data in Chart 19.

California Department of Financial Protection and Innovation 31

Returned Checks

Chart 20: Payday Loan Transactions: Returned Check Volume

Source: Survey question 83 and Annual Report question 1

Number of transactions with returned check fees charged

Number of transactions without returned check fees charged

Of 5.6 million payday loan transactions in 2023, 370,545 (6.54 percent) resulted in
returned check fees.

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Returned Checks (continued)

Chart 21: Returned Check Fees vs. Transaction Fees

Source: Survey questions 82 and 84

Returned Check Fees

Collected

California Department of Financial Protection and Innovation 33

Customers Receiving Government Assistance

Loans Made to Customers Receiving Government Assistance

Approximately 61.29 percent of licensees reported serving customers who received government
assistance. Those customers accounted for 10 percent of all customers (885,573). Approximately
17.2 percent of licensees reported that more than 25 percent of their customers received government
assistance. Table 11 reflects number of customers that received government assistance in 2023.

Table 11: Number of Customers Receiving Government Assistance

Source: Survey question 91 and Annual Report question 3

Number of customers Number of

receiving assistance licensees
88,841 57

California Department of Financial Protection and Innovation 34

Dispute Arbitration

Chart 22: Percentage of Licensees with Dispute Arbitration Clause in Written Agreement
Source: Survey question 92

Chart 23: Percentage of Licensees with Dispute Arbitration Clause in Written Agreement That
Prohibits Borrowers from Joining Class Action
Source: Survey question 93

California Department of Financial Protection and Innovation 35

Covered Borrowers

Report of Payday Loans to Active Military Servicemembers and Dependents

One licensee reported one customer who was “covered borrower,” which includes active
members of the military and their dependents. The customer made one transaction in the amount
of $300. (Source: Survey questions 49-52)

California Department of Financial Protection and Innovation 36

California Department of Financial Protection and Innovation
Toll-Free: 1-866-275-2677
TTY: 1-800-735-2922
Online: dfpi.ca.gov