Using banks to avoid CA lending law + Single payer commission + Chipping away at Obamacare

Dec. 19--Happy Thursday, alerters! It's debate night and the start of my week-long vacation visiting family in Chicago. Which means I'll be fielding all the hot takes on the Dems' performances from the peanut gallery that is my parents. Wish me luck, and see you after the holidays.

YOU CAN BANK ON IT

Assemblywoman Monique Limón, D-Goleta, has spent much of her time in the Legislature on a law to crack down on the lending industry's habit of imposing triple-digit interest on loans between $2,500 and $10,000.

Her effort culminated in Assembly Bill 539, signed this year by Gov. Gavin Newsom that restricts those mid-sized loans to 36 percent. The legislation is seen by advocates as an overdue rebuke to lenders who make good money on vulnerable borrowers, many of whom are poorer people of color.

But when the hour strikes midnight on Jan. 1, when the law is scheduled to take effect, California regulators might have their oversight hands full.

Before the legislation ever earned Newsom's approval, a handful of online companies said during earnings calls that they'll partner with out-of-state banks to continue charging higher interest.

"As you know, in California a piece of legislation named AB 539 continues to move ahead," said Elevate Credit CEO Jason Harvison in July. "We expect to be able to continue to serve California consumers via bank sponsors that are not subject to the same proposed state level rate limitations."

State banks aren't bound by another state's usury laws, meaning Legislatures have a hard time enforcing their rules over third-party vendors and halting the so-called "rent-a-bank schemes."

It's a legally dubious arrangement that Congress and the courts have tangled with for years, and things still aren't all that clear.

But the lenders' strategy has Limón on high alert.

The Assemblywoman issued a sharp rebuke and note of caution in December letters to Elevate Credit, Curo Group Holdings and Enova International, the three lenders expected to collaborate with out-of-state banks.

"Such intentions seek to undermine the will of Californians as expressed through their democratically elected representatives, and such efforts will be met with stiff opposition from the state's enforcement agencies," Limón warned in December letters written to the companies' executives and then obtained by The Sacramento Bee.

Limón isn't the only official watching.

She notified the California Department of Business Oversight and the attorney general's office. Assembly Speaker Anthony Rendon, D-Lakewood, has also taken note.

To read the full story, please click here.

AN END TO OBAMACARE?

Former President Barack Obama's signature law is in partial peril.

We saw this coming, kind of -- President Donald Trump promised on the campaign trail that he'd "repeal and replace" the Affordable Care Act, often accosting the individual mandate that Republicans have long argued as an unconstitutional requirement that Congress does not have the authority to impose.

It's another chapter in a politically bloody battle that's largely pitted Republicans and Democrats against one another, leaving Trump's campaign promise for the courts decide.

After a Texas judge determined the law was unconstitutional, a legal challenge to Trump's action made its way to a federal appeals court.

The three judges on that court on Wednesday struck down the individual mandate, largely seen as the glue that holds the law together, and sent the case back to the Texas judge to decide on other aspects of the so-called Obamacare.

California Attorney General Xavier Becerra said his coalition defending the law is not going down without a fight.

"For now, the president got the gift he wanted -- uncertainty in the healthcare system and a pathway to repeal -- so that the healthcare that seniors, workers and families secured under the Affordable Care Act can be yanked from under them," said Attorney General Xavier Becerra, less than an hour before he held a press conference on what the state could stand to lose. "California will move swiftly to challenge this decision, because this could mean the difference between life and death for so many Americans and their families."

A LONG SHOT

The Assembly Bill 5 saga continues.

First, there are the lawsuits challenging the landmark labor bill passed this year to require independent contractors to be classified as employees.

Then there are the legislative fixes.

Assemblywoman Lorena Gonzalez, D-San Diego, knew there would be some clean-up to complete once session resumes in January.

But Republican Assemblyman Kevin Kiley of Rocklin is wasting no time introducing his own plan to amend AB 5.

Kiley announced on Wednesday his "Right to Earn a Living," legislation to be formally introduced as an Assembly Constitutional Amendment in January, his office said.

The proposal would "nullify all conflicting laws and regulations, including AB 5's restrictions on independent contracting," a press statement read.

"Rarely has a single bill caused so much harm to so many people so quickly," Kiley said. "But even before AB 5, California's laws were more hostile to workers than any state in the nation, with arbitrary restrictions on vocational freedom and working conditions."

Meanwhile -- Riding off the victory of AB 5, a group of drivers filed a class-action lawsuit against Uber, a company that's pledged millions to defeat the law. The drivers are seeking retroactive pay, benefits and overtime, The Bee's Wes Venteicher reports.

It's unlikely Kiley's bill makes a wave, given a Democratic supermajority in both houses and leadership's affinity for the legislation.

"I think we have to look at things on a case by case basis," said Assembly Speaker Anthony Rendon in a recent interview with The Bee. "I'm more inclined to want to see more people become regular employees than anything."

Still, expect there to be attempts come the new year to chip away at the bill and for industries to lobby for additional exemptions to AB 5.

Kiley's might be the first formally introduced, but it won't be the last.

QUOTE OF THE DAY

"PG&E: Our reorg plan requires Governor approval. We're good corporate citizens.

Gov.@GavinNewsom: Your plan stinks & does nothing to fix PG&E's problems.

PG&E: Um, maybe we don't need his approval after all.

Court: Plan approved.

PS: PG&E isn't for CA. It needs to be public." -- State Sen. Scott Wiener, the San Francisco Democrat and one of the many lawmakers likely to lead a legislative crusade against the utility next year.

Best of The Bee:

--

California's health insurance marketplace is on track to enroll more people this year than last year, state officials said Wednesday.California's health insurance marketplace is on track to enroll more people this year than last year, state officials said Wednesday, by Sophia Bollag

-- Michelle Obama is set to participate in a moderated question and answer session Wednesday, April 1, at the Golden 1 Center, by Andrew Sheeler

--

California renters are set to get a series of new protections in the coming year. Landlords will get new restrictions, by Andrew Sheeler

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