Are Tandas Legal

Although tandas can play an important economic role among Mexicans, they also perform important social and emotional functions in people`s daily lives, as they use them as a forum to improve their status among other Tanda members and staff through religious participation in the association. To give an example from Franziska Castillo Tandas` article: Informal credit clubs where trust meets need, she mentions her neighbor Gerardo, 22, who joined a tanda after his aunt vouched for him in the group. “If I have the money in my hands, I will spend it,” Gerardo pleaded to participate in the tanda. He can`t let go of his club because his grandmother, a long-time member of Tanda, would be disappointed in him. [8] These social constructs create a platform that promotes savings among members. While the average American saves only five percent of their income per year, Mexican immigrants typically send about 11.5 percent of their income to their home country. [8] According to anthropologist Lourdes Gutierrez Najera, tandas are widespread among migrants from Oaxaca. “These private agreements depend on mutual trust,” said Richard T. Griffin, the attorney representing Jung-Hie Park, the plaintiff who unsuccessfully tried to collect a $50,000 debt from one of the participants in the Ross court. “If the courts say they are not legal, an important basis for that trust will be removed, as the agreement will have no legal sanction.” Cuban-American Barb Mayo describes a tanda as follows: “It`s like an interest-free loan with your friends.

Mayo had never heard of Tandas when she was growing up, and it wasn`t until she started working in sales for a cable company in Southern California that she was introduced to the concept. Well, some of the cases he investigates are tandas that have gone wrong: when the person organizing disappears with everyone`s contributions or a participant refuses to pay his share. This is the first litigation to affect such pools, but the decision will only set a binding precedent if it is upheld on appeal. While this decision may not be appealed, some of those involved believe the findings send a troubling message to people who are struggling to secure financing if the regular banking community doesn`t help them. There is, of course, a real risk. Someone could be the first in the group to get the pot and never come back. The leader was able to skip the city with all the money. It happens. But Carlos Vélez-Ibáñez, an anthropologist at Arizona State University who has written a book on tandas, says it`s quite rare. Correa says credit circles are tasked with supporting entrepreneurs and job creators like Alicia Villanueva.

And, he says, no matter what you call them — tandas, cundinas, credit circles, rotating savings and credit unions — they work, and it`s time to bring them out of the shadows. Judge Edward M. Ross ruled this week that organizers have no legal recourse to collect debts from those who participate in such pools. Younger generations have created companies that modernize tandas with online platforms. [10] (Yahoo Finance, for example, developed the short-lived Tanda app, which allowed friends and families to participate in the same group without being geographically nearby.) [11] These platforms help solve problems caused by traditional tanda, such as transparency, organization, location, and methods of collecting and distributing money. Maureen Paredes grew up in Mexico and saw her mother participate in tandas at a young age. While these types of problems with tandas are rare, Meza says there is always a potential risk when exchanging money with a group. Everyone pays $2,000. Everyone receives $2,000.

They are called Tandas or Cundinas, depending on the situation, in Mexico. Brazilians call them pandeiros; These are Susus in West Africa and the Caribbean and Hui in Asia. What I want to emphasize is that it is not illegal. No one weighs on people. There are no fees, contracts or interest. No one sells anything. Instead, it`s just an easy way for people to help each other. While the informal nature of tandas may sound appealing, Meza says it might be a good idea to add a bit of formality and design a document that clearly describes the participants and their roles – despite the fact that it may discourage some participants. There are many people who never stop making tandas. Once they finish one, they start another. As a member of a family of five, Paredes said that beyond paying expenses such as bills and mortgage payments, it was difficult for his family to save. And while many people in Mexico don`t have access to or don`t have access to traditional financial services and credit, Paredes` family has placed the money they collected from Tandas into a savings account for various purposes and needs.

When it happens: A tanda can happen at any time and is mainly used for short-term savings goals. In Mexico, tandas, like millions of citizens, pay for celebrations, emergencies or a way for people who may not have access to credit to meet their needs. Especially for women, Tandas facilitate social media and make them feel less isolated in Los Angeles. As the women she quotes jokingly suggest, “The only reason women participate in tandas is gossip, otherwise it doesn`t make sense. Therefore, attending Tanda`s meetings makes the separation of her hometown of Yalalag more bearable. [9] It is important to note that they also help migrants save money. [9] In a brief order, the judge stated that he had determined that “the operation and organization” of the Kye before him “is in fact a lottery and, as such, is being illegally exploited by the organizers.” What is known in the Latin American community as Cundinas or Tandas, in the Japanese-American community as Tanamoshi, and in the African-American community as “family investment teams” often differs in the details of the Korean Kye operation, which Ross considered illegal. While there are a few more requirements to join a circle of credit than a tanda, the process is still much easier than getting a bank loan, especially for those who don`t have a bank account or legal immigration status. Among Mexicans, these forms of informal savings clubs play an important role in maintaining the livelihoods of many people living in Mexico and the United States. It is important to note that Tanda`s important cultural practices are among other Latino and Chicano populations in the United States. [6] According to cultural anthropologist Carlos Vélez-Ibáñez – the first researcher to critically examine this cultural practice among Mexicans – tandas are based on mutual trust. [2] [7] As Vélez-Ibáñez explains, trust “shapes the expectations of relationships within vast networks of interpersonal connections in which intimacy, favors, goods, services, emotions, power, or information are exchanged.” [2] California Senator Lou Correa says that when he was a child who grew up in poor neighborhoods in central Orange County, it was a very popular way to get a loan.

He calls Tandas an alternative to payday lenders who charge what he calls out-of-control interest rates. But this document doesn`t need to be too complex. And since not all tandas are created equal – some can pay every week, others every payment period – writing these distinctions on paper can avoid any possible confusion. In what could discourage clandestine lending in several minority communities in Los Angeles, a Los Angeles Superior Court judge ruled that private cash pools or financial groups among Korean-Americans called Kyes are illegal lotteries and violate state security laws. These ties are mainly nurtured by women, who most often also run tandas – or what he calls rotating savings and credit associations. Since tandas are not subject to government regulation and, in most cases, are set up through an informal agreement, you won`t have much recourse if you don`t get the expected full payment. For Santa Clara County Assistant District Attorney Hugo Meza, it`s not just part of his job, but something he cares about making sure people safely participate in tandas. Growing up, his mother and colleagues frequented tandas at a printing house in the South Bay.

“There is no section of the penal code here in California that prohibits people from organizing or participating in a tanda. However, if tanda doesn`t go as planned or if someone doesn`t live up to their part of the deal, actions related to a tanda could become illegal,” Meza says. Litnis has been participating in Tandas for over five years and meets it for the first time in his native Honduras. Here in the United States, his family meets virtually every month and agrees on an amount that each person will contribute to a pot. Each time, another person in the group can keep the money in the pot, and everyone in the circle gets their turn. I`ve heard people say, “Don`t give money to your family or friends because it always ends in an argument.” But it`s not a loan, so it won`t happen.