Claim: Climate Change is Driving Impoverished Californians to use “Predatory” Payday Loans to Pay Energy Bills

by Eric Worrall at

Apparently if it wasn’t for climate change, we wouldn’t be having so much of this hot and cold weather which is stretching household finances in California.

Climate change driving demand for predatory loans, research shows

Study connects heatwaves and cold snaps to surges in payday lending, keeping people in debt and harming communities of color

Hilary Beaumont Mon 15 Apr 2024 20.00 AEST

Two competing payday loan stores stand on the corners of an intersection in south Los Angeles. An area of persistent poverty, south LA is also a banking desert where payday lenders fill the gap. Long lines form inside the stores on the first of the month, when rent is due.

Guillermina Molina, a 60-year-old retired housekeeper, visits the same Speedy Cash each month. During the summer months – which are becoming increasingly hot – she runs her air conditioner but frets about her utility bills. “It’s kind of hard because the [power bill] is coming up too high because you gotta have the air conditioner on,” Molina said.

During heatwaves, Molina’s daughter, Vanessa Vargas, checks in on her every day. “I don’t want to pull up to her house and find her [passed out] because of the heat,” she said.

Molina doesn’t have savings, so to cover her bills she takes out a $225 payday loan every month, paying $45 in interest on each loan. When she’s unable to pay back her loan on time, she’s charged extra. “There’s nothing left over,” Vargas said.