2022

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

DEPARTMENT OF FINANCIAL
PROTECTION & INNOVATION
Lourdes M. Castro Ramírez, 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 July 2023

 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 – 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
Collections............................................................................................................................................25
Fees......................................................................................................................................................28
Subsequent Customers .......................................................................................................................29
Customers Receiving Government Assistance ..................................................................................32
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. Starting in 2005, the Department began regulating payday loans to provide greater oversight
and guarantee that consumers have the disclosures necessary to make informed decisions.
Since 2020, the COVID-19 pandemic had a significant impact on the state and national economy and
there was a decline in payday lending activity in California during 2020 and 2021. Previous reports
showed that the decrease in payday activity correlated with COVID-19 relief efforts, including the
distribution of stimulus checks, loan forbearances, and growth in alternative financing options. The
rebound in activity in payday loans reflected in this report is likely due to the economic recovery
following relaxation of COVID-19 restrictions. In 2022, California’s payday lenders made 18 percent
more loans, representing a 19 percent increase over 2021. The number of individual customers rose
nearly 14 percent.
The annual report and survey data in this report is unaudited and covers licensees’ activities in
calendar year 2022. The report also provides historical data back to 2013.

Key Findings

• California’s payday lenders made more than 5.3 million loans in 2022, worth more than $1.51
billion. These transactions represent an increase of 18.4 percent and 19.2 percent,
respectively, from 2021 totals. Payday lending in 2022 rebounded to near 2020 levels after a
drop in 2021.

• In 2022, more than 900,000 individual customers took out payday loans, a 13.9 percent
increase from the 2021 total.

• Nearly 61.9 percent of licensees reported serving customers who received government
assistance.

• Subsequent loans by the same borrower accounted for 69.2 percent of the payday loans in
2022 and 79.5 percent of the aggregate dollar amount.

• Of subsequent payday loans by the same borrower, almost 40 percent were made the same
day the previous transaction ended.

• Another 24.5 percent of payday loans were made one to seven days after the previous
loan repaid.

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• Responsive licensees charged $224.2 million in fees on payday loans in 2022. Of that total,
71.6 percent – or $160.5 million – came from customers who made seven or more
transactions during the year.

• For the year, 34 percent of payday loan customers had average annual incomes of
$30,000 or less, and 19 percent had average annual incomes of $20,000 or less.

• The number of payday loan customers referred by lead generators increased 7.4 percent,
from 109,486 in 2021 to 117,559 in 2022.

• Almost 22 percent of licensees made payday loans over the internet during 2022. Online
payday loans accounted for 48.7 percent (2,607,942) of all payday loans.

• Approximately 55.3 percent of customers (497,777) took out payday loans over the
internet.

• In 2022, 217,104 consumers took out single payday loans, while 202,921 consumers took out
10 or more payday loans.

• The use of cash to disburse funds to customers and receive payments from customers
continued to decline in 2022. Measured in dollar amounts, cash disbursements decreased
from 53.7 percent in 2021 to 46.5 percent in 2022.

• Other forms of disbursements, including wire transfers, instant funding, Zelle, Venmo, and
debit cards, climbed to 35.6 percent from 27.4 percent in 2022. Twenty-nine percent of
customers’ payments were made with cash, down from 34.6 percent in 2021.

• Electronic transfers accounted for 26 percent of customers’ payments, compared to 29.2

percent in 2021.

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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,
2022.
As of December 31, 2022, the DFPI licensed 109 payday lenders. Of those, 104 filed required annual
reports in time to be included in this report, four surrendered their licenses after January 1, 2023, and
one licensee did not surrender or file the annual report.
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 2022, the total dollar amount of payday loans increased by 19.2 percent, the number of payday
loans increased 18.4 percent, and the number of payday loans obtained increased13.9 percent
increase compared to 2021. The average number of payday loans per customer has declined from
6.84 in 2013 to 5.95 in 2022.

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**

2022 $1,506,009,181 5,359,132 900,334

2021 $1,263,483,126 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
2013 $3,165,667,707 12,163,832 1,779,471

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

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CDDTL Historical Data - Transactions (continued)

The average payday loan dollar amount increased to $251 in 2022. The average annual percentage
rate (APR) for payday loans increased to 364 percent in 2022 from 353 percent in 2021.

Table 2: Transaction Analysis

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

Year
payday loans rate (APR) payday loans

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
2013 $260 408% 17

* 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 2021 to 2022, returned checks in payday loan transactions increased by 38.5 percent. Returned
checks as a share of total payday loans in 2022 increased to 10.32 percent from 8.82 percent in
2021, the highest level recorded in the past 10 years.

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

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%
2013 706,214 5.81% $191,816,906 6.06%
* 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 2021 to 2022, the total dollar amount of returned checks recovered in payday loan transactions
increased 47.7 percent, to approximately $102.14 million. Recovered returned checks as a share of
total payday loans in 2022 increased to 7.17 percent from 5.90 percent in 2021, the highest level
recorded in the past 10 years.
Table 4: Returned Checks Recovered

Total dollar amount of

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

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%
2013 370,812 3.05% $88,276,576 2.79%
* Variances from data published in the annual report due to late filings by licensees.
** Includes partial recoveries.

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CDDTL Historical Data – Returned Checks (Continued)

From 2021 to 2022, both the number and the dollar amount of checks charged off (or payday loans
unlikely to be collected), increased by 21.7 and 21.8 percent, respectively. The number of charged-off
checks as a share of total payday loans in 2022 increased to 2.14 percent.

Table 5: Checks Charged Off

Total dollar amount

Total number of Total number Total dollar amount
Year of checks charged
checks charged off** as percentage as percentage
off**

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%
2013 336,780 2.77% $88,390,920 2.79%

* 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

The information in Table 6 and Table 7 reflects licensing activity for calendar years 2013 through
2022. 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.
The information in Table 6 shows there has been a decline in the number of licensed locations. From
2021 to 2022, the number dropped by 115, or 13.8 percent. From 2013 to 2022, the number dropped
by 1,339, or 65.1 percent.
Table 6: Licensed Locations

Year Number

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
2013 2,058

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)
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
2013 38 67 105

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 PART II: CONSOLIDATED INDUSTRY SURVEY
BACKGROUND

In January 2023, the DFPI provided the California Deferred Deposit Transaction Law – 2022 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, as well as potential consumer risks. The industry survey
collected information on licensees’ activities in calendar year 2022 related to the following:
• Volume of transactions per customer • Fees
• Customer ages and income • Subsequent transactions by the same
• Internet transactions borrower
• Lead generators • Transactions with customers who
• Disbursements to customers receive government assistance
• Payments from customers • Returned checks
• Payment plans • Dispute arbitration
• Collections • Covered borrowers

Some data provided in the survey results may not exactly match data in the annual report (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 2022. 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

217,104
202,921

112,129

83,773
68,677
59,563
50,442
39,352 35,069 31,304

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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

2022
Number of Customers 497,777
Number of Transactions 2,607,942
Transaction Amounts $709,474,125

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 Lead Generators

The number of payday loan customers referred by lead generators in 2022 increased from 109,486
in 2021 to 117,559 in 2022.

Chart 6: Number of Payday Lenders Using Lead Generators

Source: Survey question 41

Table 9: Lead Generator Fees

Source: Survey questions 43 and 44

2022
Fees Paid to Lead Generators $8,940,816
Number of Customers Who Made Payday Loans
117,559
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

approximately13 percent in 2022 from 14 percent in 2021.

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Disbursements to Customers

Chart 8: Number of Disbursements to Customers

Source: Survey question 54

Of the disbursements above, cash represented 46.5 percent; electronic ACH, 17.1
percent; paper check, 0.7 percent; and other, 35.6 percent.

The “other” category includes the following payment types as described by licensees:
wire transfer, instant funding, Zelle, Venmo, 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 the disbursements above, cash represented 46.5 percent; electronic ACH, 17.2
percent; paper check, 0.7 percent; and other, 35.6 percent.

The “other” category includes the following payment types as described by licensees: wire
transfer, instant funding, Zelle, Venmo, 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 29 percent of customer payments; electronic ACH, 26 percent;

paper check, 2.7 percent; debit card, 15.8 percent; credit card, 0.5 percent; and other,
26 percent.

The “other” category includes the following payment types as described by licensees:
money order, Money Gram, Western Union, 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 the payments above, cash represented 29.1 percent; electronic ACH, 25.3 percent;
paper check, 2.7 percent; debit card, 16.1 percent; credit card, 0.5 percent; and other,
26.2 percent.

The “other” category includes the following payment types as described by licensees:
money order, Money Gram, Western Union, 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

2022
Total Dollar Amount of Payment Plans Arranged $52,416,387
Total Number of Payment Plans Arranged 224,163

California Department of Financial Protection and Innovation 24

Collections

During calendar year 2022, the time 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 236,112 customers were not in a payment plan and paid in full as a result of in-
house collections in 2022. Those customers accounted for 920,146 transactions. (Source:
Survey questions 67 and 68)

The total dollar amount of 2022 transactions that were not in a payment plan and paid in full
as a result of in-house collections was approximately $230 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 $224.2 million in fees on payday loans they originated in 2022. Of that
total, 71.6 percent – or $160.5 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

$160,545,120

$9,025,061 $11,478,088 $11,945,277

$8,602,246 $10,382,812 $12,194,487

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 5.3 million payday loans reported for 2022, 69.2 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 $1.51 billion in payday loan transactions reported for 2022, 79.5 percent of the total
dollar amount represented transactions with repeat borrowers.

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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, 40 percent were made by the same borrowers
on the same day the previous transaction closed; 24.5 percent were made one to seven
days later; 12.4 percent were made eight to 14 days later; and 23.2 percent were made
15 days or more after the previous transaction closed. These percentages are based on
3.71 million subsequent transactions for which licensees provided the breakdown in
Chart 19.

California Department of Financial Protection and Innovation 31

Customers Receiving Government Assistance

Loans Made to Customers Receiving Government Assistance

Nearly 61.9 percent of licensees reported serving customers who received government assistance.
Those customers accounted for 10.4 percent of all customers (900,334). Approximately 11.4 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 2022.

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
93,429 66

California Department of Financial Protection and Innovation 32

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 5.3 million payday loan transactions in 2022, 368,766 (6.9 percent) resulted in
returned check fees.

California Department of Financial Protection and Innovation 33

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 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

In 2022, no licensee indicated they had a customer who was “covered borrower,” which includes
an active member of the military and their dependent. (Source: Survey questions 49-52)

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