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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- Springing the Debt Trap-Exec Summary
Published: Dec 13 2007 Issue: Payday Loans
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
Published: Dec 10 2007 Issue: Payday Loans
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...
- North Carolina Consumers after Payday Lending
Published: Nov 13 2007 Issue: Payday Loans
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
Published: Jun 4 2007 Issue: Payday Loans
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...
- Foreclosure, Predatory Mortgage and Payday Lending
Published: Mar 21 2007 Issue: Mortgage Lending, Payday Loans
Testimony discusses development of subprime market, inequities and foreclosures having a devastating effect in areas including urban areas with high concentrations of minorities
- Comment: To Department of Defense on Military Lending Act
Published: Feb 8 2007 Issue: Car Title Loans, Payday Loans
Comments on Military Lending Act submitted to Department of Defense by Consumer Coalition on Feb. 5, 2007.
- Small Loan CRA Comment
Published: Feb 2 2007 Issue: Car Title Loans, Overdraft Loans, Payday Loans
CRL Comment to the Federal Deposit Insurance Corporation on its proposed guidelines for affordable small-dollar loans.
- CRL Review of "Defining and Detecting Predatory Lending" by Donald P. Morgan, Federal Reserve Bank of NY, January 2007
Published: Jan 23 2007 Issue: Payday Loans
CRL critiques faulty research report by Don Morgan, which attempts to compare states with and without payday lending but misidentifies many of those states.
- Financial Quicksand: Payday lending sinks borrowers in debt with $4.2 billion in predatory fees every year
Published: Nov 30 2006 Issue: Payday Loans
CRL research report finds that payday lending costs Americans $4.2 billion per year in fees.
- Georgia's Payday Loan Law: A Model for Preventing Predatory Payday Lending
Published: Jun 29 2006 Issue: Payday Loans
Brief analysis of Georgia's law preventing payday lenders from circumventing their consumer credit interest rate cap and other protections.