Research & Analysis
The payday lending industry frequently supports what they call reform of their own industry in state legislative battles, because they know that most of the measures in debate will not slow the rate at which they can make repeat payday loans to the same borrower. Our report, Phantom Demand, shows how the industry depends on “churned” borrowers, those who have to take a new loan before their next payday, for three quarters of their business.
In public, payday lenders say their loans are for infrequent use. In private, they say things like this: "The theory in the business is you've got to get that customer in, work to turn him into a repetitive customer, long-term customer, because that's really where the profitability is." (Dan Feehan, CEO of Cash America, remarks made at the Jeffries Financial Services Conference, 6-20-07)
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- Analysis: New State Data Show California Payday Lenders Continue to Rely on Trapping Borrowers in Debt
Published: Oct 9 2014 Issue: Payday Loans
The California Department of Business Oversight (DBO) released data on October 3, 2014 showing the extent to which repeat lending comprises the bulk of payday loan activity.[i] Over 75% of all...
- Letter to CFPB: Payday Rule Should Cover Longer-Term, Multi-Payment Loans
Published: May 2 2014 Issue: Payday Loans
American consumers need strong protections from unfair, deceptive or abusive practices in the payday and small-dollar lending markets. CRL joined Americans for Financial Reform and more than 100...
- Testimony at the CFPB’s Hearing on Payday Lending (Nashville, TN)
Published: Mar 25 2014 Issue: Payday Loans
Oneshia Herring, legislative counsel at CRL, discusses three reasons why payday loans are an inherently defective product that violate any reasonable concept of fair and responsible lending. This...
- Letter to Federal Regulators: Stop Illegal Payday Loans
Published: Oct 28 2013 Issue: Payday Loans
The National Consumer Law Center, Consumer Federation of America, Center for Responsible Lending and 26 other consumer and civil rights groups sent a letter to federal regulators urging stronger...
- Effective State and Federal Payday Lending Enforcement: Paving the Way for Broader, Stronger Protections
Published: Oct 4 2013 Issue: Payday Loans
The predatory features of payday loans, and the impact of their long-term debt on consumers, have in recent years drawn the attention of legislators and regulators. Policymakers at all levels have...
- The State of Lending: Payday Loans
Published: Sep 10 2013 Issue: Payday Loans
Payday loans—high-cost, quick-fix loans that trap borrowers in debt by design—cost cash-strapped American families $3.4 billion in fees every year. Of that number, more than two-thirds—$2.6...
- The State of Lending: Bank Payday Loans
Published: Sep 10 2013 Issue: Payday Loans, Bank Payday Loans
Even in the face of strong opposition by banking regulators, a few banks continue to make triple-digit payday loans. In this chapter, our analysis shows no meaningful distinction between...
- Comments to Department of Defense: Expanding Credit Protections for Service Members and Their Families
Published: Aug 1 2013 Issue: Overdraft Loans, Payday Loans
Although the Military Lending Act has resulted in significant improvements, Service members continue to be the target of predatory lenders. In 2012, members of the military filed 61,642 complaints...
- Testimony: Seniors Vulnerable to Predatory Payday Loans
Published: Jul 24 2013 Issue: Bank Payday Loans, Payday Loans
Rebecca Borné, senior policy counsel for CRL, testifies on the harms of payday loans and how seniors are particularly vulnerable. The Senate Special Committee on Aging held this hearing to examine...
- Advocates Support Proposed Restrictions on Bank Payday Lending
Published: May 30 2013 Issue: Bank Payday Loans, Payday Loans
CRL and allies urge the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC) to implement and strengthen their proposed guidance to restrict "deposit...