While the payday lending industry frequently describes its typical customer in detail, discussion of race is noticeably absent. This report corrects that omission. Our analysis of North Carolina neighborhoods reveals a powerful relationship between the proportion of African-Americans in a neighborhood and the prevalence of payday lending stores. African-American neighborhoods have historically been disadvantaged by unfair lending practices. This study...
Payday, car-title, and similar high-cost loans, typically with interest rates of 100% APR and higher, trap people in crippling long-term debt. CRL advocates for regulators to require lenders to verify borrowers can afford to repay a loan before that loan is issued. CRL also advocates for interest rate caps of no higher than 36% APR and for enforcement of current usury laws.