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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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  • 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...

  • All Federal Credit Unions Should Shun Payday Lending
    Published: May 16 2013      Issue: Bank Payday Loans, Payday Loans
  • 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...

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