Payday and Other Small Dollar Loans

Vehicle-title loans are high-cost loans with little or no underwriting that are secured by a borrower’s car title. Title lenders charge fees and interest as high as 300% APR and put borrowers’ important assets at risk of repossession.

In the 30 states that allow payday lending, single-payment and payday installment loans drained more than $2.4 billion in fees in a single year from low-income borrowers.

The National Consumer Law Center, the Center for Responsible Lending and the Student Borrower Protection Center submitted to the Office of the Comptroller of the Currency, Federal Reserve System, and Federal Deposit Insurance Corp. on the Request for Information on Bank-Fintech Arrangements Involving Banking Products and Services Distributed to Consumers and Businesses. The comments focus on bank-fintech partnerships in the...

Among the hottest consumer finance topics in recent years is the proliferation of online lenders offering fintech cash advances, including the subset of those lenders who offer earned wage advances (EWA). These are very short-term loans of small dollar amounts that users can access through a smartphone app. Lenders that offer these products strenuously attempt to avoid being regulated like...

Online lenders offering earned wage and cash advances primarily through cell phone apps have proliferated in the past decade, with companies claiming that existing credit laws do not apply to their products.

States in blue have a state-specific factsheet, while states in gray can use the national factsheet which highlights data from users in all 50 states. Access the factsheets at the links below. Arizona Arkansas California Colorado Connecticut Florida Georgia Illinois Indiana Louisiana Maryland Massachusetts Michigan Minnesota Mississippi Nevada New Jersey New York North Carolina Ohio Pennsylvania South Carolina Tennessee Texas...

Earned wage advances (EWA) are small, short-term loans that are typically repaid on the consumers’ next payday. Research by CRL and others has demonstrated using these fintech cash advances leaves many consumers worse off - paying high fees for small loans, increasing their risk of overdraft, and having to reborrow paycheck after paycheck. Regulators should enforce credit laws to increase...

Consumer installment loans offered by nonbank lenders can be an expensive form of credit that keeps borrowers in costly long-term debt. Lenders offer these loans to individuals for their personal or household use. Consumers borrow between $1,000 to $25,000 or more. Many states regulate the costs and other terms of these loans, usually requiring them to be repaid monthly over...

The Center for Responsible Lending (CRL) and the National Consumer Law Center (NCLC) submitted an amicus brief urging the U.S. Court of Appeals for the 10th Circuit to correct the lower court’s misinterpretation of a Colorado law, and the federal law on which it is based, in order to prohibit out-of-state banks from helping lenders charge Colorado borrowers interest rates...

The Problem High-cost lenders are ignoring state law and continuing to lend high above the state's legal interest rates, using a practice called Rent-A-Bank. In some cases, these rates are under 36% on very large loans. In others, rates are in the triple-digits, charging consumers up to 200% to finance car repairs, furniture, and even puppies. How Rent-A-Bank Works In...