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."

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?

News and Views on Bank Payday Lending