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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- Senate Bill 515 "Reforming Payday Loans"
Published: Apr 5 2013 Issue: Payday Loans
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...
- CRL Strongly Supports SB 515 Reforming Payday Loans
Published: Apr 2 2013 Issue: Payday Loans
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...
- Triple-Digit Danger: Bank Payday Lending Persists
Published: Mar 21 2013 Issue: Bank Payday Loans, Payday Loans
Banks making payday loans continue to trap customers in a cycle of debt, according to a CRL study, "Triple-Digit Danger: Bank Payday Lending Persists." Banks pitch payday loans as short-term...
- Renewed Call for Federal Action Against Bank Payday Loans
Published: Mar 13 2013 Issue: Bank Payday Loans, Payday Loans
Federal regulators should take immediate action to stop unaffordable, high-cost payday lending by banks. That is the key message from more than 260 groups and individuals in a letter to the heads...
- How Payday Lending by Banks Violates Safety & Soundness Standards
Published: Feb 28 2013 Issue: Bank Payday Loans, Payday Loans
Banks that do payday lending (a.k.a. "Direct Deposit Advances") are engaging in risky behavior. This legal brief offers legal precedents and shows why banking regulators responsible for monitoring...
- New York Times Article on Banks Aiding Payday Loans: There's Even More to the Story
Published: Feb 26 2013 Issue: Bank Payday Loans, Payday Loans
On February 23, the New York Times published an article describing how some banks enable Internet payday lending. In this brief, CRL provides additional legal context to supplement that article....
- Reforming the Debt Trap in California
Published: Jan 31 2013 Issue: Payday Loans
For California families living paycheck to paycheck, the high price of a payday loan and the fact that it must be paid off in one lump sum two short weeks later virtually ensures that...
- U.S. Senators ask Regulators to Stop Bank Payday Lending
Published: Jan 7 2013 Issue: Bank Payday Loans, Payday Loans
Five U.S. Senators have asked the OCC, the FDIC and the Federal Reserve to stop the banks under their respective jurisdictions from making predatory payday loans. At least four big banks have...
- CRL Comments on Proposed Rules for NCUA Payday Alternatives Loan Program
Published: Nov 30 2012 Issue: Bank Payday Loans, Payday Loans
CRL urges the NCUA to structure their Payday Alternatives Loan (PAL) program to reflect the broad range of alternatives, to prevent the program from operating like a series of high-cost payday...
- CRL and NCLC Comments on Wells Fargo Payday Lending and CRA Examination
Published: Nov 29 2012 Issue: Bank Payday Loans, Payday Loans
Wells Fargo's direct engagement in payday lending should have a significant negative impact on their upcoming Community Reinvestment Act evaluation.