Payday Lending Overview
The Debt Trap in 10 Seconds.
Payday lending as currently practiced amounts to legal loansharking
Payday loans are marketed as a way to put quick cash into your hands when you have a budget shortfall, but the business is designed so that borrowers can’t easily pay off their loans and walk away. The average borrower has nine repeat loans per year, and at $50 each time for a loan of $300, that means they’re paying more in interest than what they borrowed.
Dig in to find out how payday lenders hold onto their customers (hint: it's not by quality customer service), what it costs us as consumers and as a country, and what we should do about it.
How do they do it?
How the debt trap works.
Phantom Demand: CRL research shows that 76% of payday lending revenue is generated by "churned" borrowers.
Now some banks have gotten into the quick cash business.
What does it cost us?
$5 billion from working people to a bad business, every year. One Advance America borrower was trapped for over five years and paid $5,000 in fees.
What people are saying.
MSNBC's Rachel Maddow calls out payday lenders for trying to wiggle out of regulations.
PBS looks at the practice of trapping people in a cycle of debt.
The Washington Post discusses payday lending industry lobbying against consumer protections.
What can we do?
Springing the Debt Trap explores solutions that have stopped the cycle of debt in some states.
