Bank Payday Lending
"CBS This Morning" interviews CRL's Rebecca Borné on predatory payday lending by banks.
Victory: Banks Pull Harmful Payday Lending Products
Only a few big banks got into the business of making payday loans (which they called by other names), but—thanks to work by thousands of advocates all over the country and vigilant regulators —all banks are now backing away from loans with triple-digit interest rates. This is a huge victory for consumers, especially those vulnerable to debt-trap lending.
"Banks must remain steadfast in preventing this kind of lending and find more suitable, transparent, and sustainable products for these customers."- Sr. Nora Nash, Sisters of St. Francis of Philadelphia
Ranking the Banks: A Survey of Seven US Bank Conducted
by Members of ICCR and Sustainalytics
A Bad Deal, not a Solution
Banks defended their payday lending by saying these loans weren't for regular use, but CRL’s State of Lending research shows that the loans were designed to produce repeat borrowing. Bank payday loans:
- Came with excessive costs. The average APR ranged from 225% to 300%.
- Created a cycle of debt. In 2011, over 1/3 of borrowers took out more than 20 loans.
- Hit seniors hard. Over 1/4 of all bank payday borrowers are Social Security recipients.
Our press release summarizes findings from the State of Lending report.
Learn More about Bank Payday
Want to understand how bank payday lending worked and why it was harmful?
- Bank Payday Lending Basics (February 2012 slideshare)
- Watch our “Bank Payday Lending Basics” (February 2012 webinar)
News and Views on Bank Payday Lending
- Press Release: Wells Fargo, Fifth Third, and US Bank Discontinue Payday Loan Products
- CRL President Mike Calhoun responds to Fifth Third Bancorp's defense of payday lending
- CRL's Rebecca Borné testifies before the Senate Special Committe on Aging on how payday loans affect senior citizens.
- Comment letter: CRL and allies urge the FDIC and OCC to proceed with their crackdown
- CRL research: “Triple-Digit Danger: Bank Payday Lending Persists” (March 2013)
- Read the letters from numerous community groups and lawmakers who oppose bank payday lending
- Bank payday lending in the news (Storify)
- Overview of Media and public concerns (March 7, 2013)
- Dr. Frederick Haynes calls on banks to stop playing predatory payday lenders.
- Consumer groups call for regulators to end the abuse before it becomes business as usual.
- CRL’s payday lending research and our July 2011 report on bank payday loans
- In response to the sign-on letter, the FDIC promises to investigate banks making payday loans.
- CRL and NCLC: Stop all federal credit unions from making payday loans