Triple-Digit Danger: Bank Payday Lending Persists

Published: March 21, 2013

Banks pitch payday loans as short-term borrowing that allows their customers to deal with a financial emergency, repay the loan, and move on. In fact, CRL's research shows that their triple-digit interest rate loans trap borrowers in a long-term cycle of repeat loans.

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Read the Summary

Banks continue to claim that their payday products are intended for short-term emergencies, but this report shows that short-term loans are not typical.  Although some participating banks have made small, recent changes in the product, bank payday loans are continuing to trap borrowers in high-cost, triple-digit debt.

Key Findings

  • Bank payday loans carry an annual percentage rate (APR) that averages 225 to 300 percent.
  • In 2011, average bank payday borrower took out 19 loans.
  • Bank payday borrowers are two times more likely to incur overdraft fees than bank customers as a whole.
  • Over one-quarter of all bank payday borrowers are Social Security recipients.

Find out more about bank payday lending.