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)
Search Payday Lending - Research & Analysis
Browse Payday Lending - Research & Analysis
- Wealth-stripping payday loans trouble communities of color
October 2, 2008
An 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.
- Los préstamos del día de pago empobrecen a las comunidades de color
October 2, 2008
Este informe analisa el impacto de los préstamos del día de pago en las comunidades de color y como ese tipo de producto financiero perjudica al bienestar económico de esas comunidades.
- High-Cost Payday Lending Traps Arizona Borrowers
September 16, 2008
CRL 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, 2008
Testimony of Uriah King, Center for Responsible Lending before the Ohio Senate Finance and Financial Institutions Committee
- Comment: Implementation of Military Lending Amendment
February 26, 2008
Comments on Implementation of Limitations on Terms of Consumer Credit Extended to Service Members and Dependents
- Springing the Debt Trap
December 13, 2007
CRL analysis of states that have tried to reform payday lending, finding that only the 36% rate cap has worked.
- Springing the Debt Trap-Exec Summary
December 13, 2007
Executive summary of Springing the Debt Trap - outlines what reforms states have tried, documents that none have worked except for the 36% rate cap.
- CRL Critique of “Payday Holiday: How Households Fare After Payday Credit Bans” by Donald P. Morgan and Michael R. Strain
December 10, 2007
A working paper by a staffer at the Fed Bank of NY is fundamentally flawed, offers no valid information, and is being used to justify policy that keeps low-wealth borrowers trapped in income-draining payday loans. The paper is not a Federal Reserve Bank report as a payday industry press release implies. Our critique exposes the fatal errors in the paper's methodology.
- North Carolina Consumers after Payday Lending
November 13, 2007
NC Commissioner of Banks and UNC study finds working families do not miss payday lending. Consumers use a variety of options to manage financial distress.
- The Payment Plan Smokescreen
June 4, 2007
Facing increasing scrutiny of the problems caused by payday lending, the industry trade group recently announced a new public relations campaign that claims to address the problem of loan flipping by requiring its lenders to offer borrowers an extended payment plan. However, this plan will not give borrowers a viable option for escaping the debt trap, and a description of the guidelines suggests lenders will offer the plan to borrowers in trouble only once per year despite the fact that the typical borrower has nine loans per year.