High-Cost Payday Loans Seeing Tremendous Growth

April 26, 2013
The Day (CT) 
payday lending news

High-cost financing, including payday loans and pawn shops, has grown in the last two decades to the point that nearly one in four Americans have used them, reports the National Bureau of Economic Research. This type of borrowing, often is plugged as a means of filling a shortfall between paychecks, typically carries steep fees. According to the Consumer Financial Protection Bureau, annualized percentage rates often exceed 300 percent. The median amount borrowed was $350, based on the agency's findings. This new research is emerging while U.S. regulators prepare to issue new rules for banks that offer short-term, high-interest loans tied to direct deposits. Proposed regulations could restrict borrowers from taking out more than one of these loans each month; but the rules would not affect loans offered by storefront vendors, pawn shops, and other services. Researchers recommend that high schools add courses in financial literacy to help future consumers understand the interest rates and terms of such loans.
Web Link

Abstract News © Copyright 2008-2013 INFORMATION, INC.
Powered by Information, Inc.

Stay Updated

Join the fight against predatory lending. Enter your e-mail to sign up for breaking news, action alerts, and CRL's original research.

   Please leave this field empty

Help Us End Predatory Lending

Predatory lending destroys family wealth, and preys on our most vulnerable communities. You can help us end abusive lending practices by donating to CRL, or by sharing our work with others.