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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- Letter to Federal Regulators: Stop Illegal Payday Loans
October 28, 2013
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 measures to stop illegal payments from being taken out of consumers’ bank accounts. The letter went to federal bank regulators, the U.S. Department of Justice, and the Federal Trade Commission.
- Effective State and Federal Payday Lending Enforcement: Paving the Way for Broader, Stronger Protections
October 4, 2013
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 acted to limit the payday lending debt trap, particularly in recent months.
- The State of Lending: Payday Loans
September 10, 2013
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 billion--is a direct result of churning borrowers into loan after unaffordable loan. This churning dramatically increases payday lending fees without providing borrowers with access to new credit.
- The State of Lending: Bank Payday Loans
September 10, 2013
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 storefront payday lending and bank payday lending. Banks give their products names such as “Ready Advance” and “Early Access,” but these loans come with the same predatory features and produce the same negative outcomes for borrowers.
- Comments by CRL and other Consumer Advocates to Department of Defense: Limitations on Terms of Consumer Credit
August 1, 2013
The Department of Defense is currently considering public comments and recommendations from other regulators on strengthening protections under the Military Lending Act. CRL and other groups have urged the DoD to significantly broaden the definition of credit covered under the law's 36% APR limit to include, among other products, all payday loans regardless of how they are structured or how long their term is.
- Testimony: Seniors Vulnerable to Predatory Payday Loans
July 24, 2013
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 the impact of payday loans on older Americans.
- Advocates Support Proposed Restrictions on Bank Payday Lending
May 30, 2013
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 advance" (i.e., payday loans) by the banks they supervise. AARP, Consumer Federation of America, the Leadership Conference on Civil and Human Rights, the NAACP, the National Consumer Law Center and the National Council of La Raza joined CRL in submitting these comments.
- All Federal Credit Unions Should Shun Payday Lending
May 16, 2013
- Senate Bill 515 "Reforming Payday Loans"
April 5, 2013
California payday loan borrowers get caught in a cycle of repeat borrowing of 459% Annual Percentage Rate (APR) loans. Reforms are necessary to ensure that payday loans serve their advertised purpose and better protect consumers.
- CRL Strongly Supports SB 515 Reforming Payday Loans
April 2, 2013
SB 515 includes three principal reforms: it caps the number of payday loans per borrower at four per year; extends the minimum term of a payday loan, so that borrowers will have more time to accumulate the amounts necessary to repay it; and requires all lenders to apply standardized underwriting guidelines to ensure that borrowers have a reasonable ability to repay their loans.