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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- Big Bank Payday Loans
July 21, 2011A new CRL report describes how banks are adding predatory payday loans to their arsenal of inappropriate loan products. These loans drain cash from low-income Americans.
- Payday Loans, Inc: Short on Credit, Long on Debt
March 31, 2011New CRL research tracking borrowers over two years dispels the notion that a payday loan is a short-term debt. Although marketed and advertised as a quick solution to an occasional financial shortfall, most borrowers remained indebted for the 24 months that followed their initial loan.
- Map of US Payday Stores per Household
November 1, 2010This color-coded map of payday stores by household reveals a disturbing pattern. Southern states are among the most targeted for these high-cost, low-dollar loans.
- 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.
