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. This is the debt trap described in our report, “Springing the Debt Trap,” which shows how the only measure that has effectively addressed the problem is a two-digit interest rate cap.
As payday lenders say in private, “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)
- Mainstream banks making payday loans
February 24, 2010National bank regulator, the OCC, must stop this trend before it takes off among more national banks, making millions vulnerable to predatory loans even in states that don't allow it from payday lending stores
- Phantom Demand: Short-term due date generates need for repeat payday loans, accounting for 76% of total volume
July 9, 2009CRL analysis reveals that a sizeable majority of payday lending volume is generated by payday debt itself—borrowers need to open a new loan shortly after repaying a previous loan because repayment leaves them with inadequate funds for other needs. 36 pp.
- APR Matters on Payday Loans
June 23, 2009CRL explores the payday lending industry’s attempt to deny the importance of the APR, or annual percentage rate of interest, in disclosing the cost of their 400 percent interest product, which routinely catches borrowers in a cycle of financially devastating long-term debt.
- Interest Rate Survey
March 30, 2009CRL conducted a national survey to measure public support for one strategy on the table: a 36 percent cap on annual interest rates for consumer loans. The survey found high levels of support for such a measure, which had very little variance across different demographic groups.
- Predatory Profiling
March 26, 2009New CRL analysis finds that California's payday lenders overwhelmingly locate in African-American and Latino neighborhoods, even after controlling for income and other factors, and drain $247 million in the process
- Payday Loans Put Families in the Red
February 20, 2009Explains how payday lending does not help borrowers avoid overdraft fees in spite of industry claims.
- A 36% APR Cap on High-Cost Loans Promotes Financial Recovery
January 31, 2009Explains the importance of a federal 36% interest rate cap in stopping predatory lending and stimulating the economy.
- Wealth-stripping payday loans trouble communities of color
October 2, 2008An examination of payday lending storefront locations in Maricopa and Pima Counties—in which over three-quarters of Arizona payday lenders are located—reveals a pattern of these stores clustering in communities of color.
- High-Cost Payday Lending Traps Arizona Borrowers
September 16, 2008CRL looks at payday lending in Arizona, where $149 million per year are stripped from working families in unfair payday lending fees.
- Ohio Payday Hearing
May 7, 2008Testimony of Uriah King, Center for Responsible Lending before the Ohio Senate Finance and Financial Institutions Committee
