Payday and Other Small Dollar Loans

The so-called "Madden fix" bill would make it easier for predatory payday lenders and other non-banks using rent-a-bank arrangements or partnerships to override state interest rate caps and make loans of 300% annual interest or higher. Unaffordable payday loans and other triple-digit interest predatory loans have devastating consequences for already financially distressed borrowers—trapping them in a cycle of debt and...

Almost eight years after Colorado enacted a payday law reform bill in 2010, payday lenders in Colorado continue to ensnare customers in a cycle of high-cost debt. Customers are drawn in by promises of easy cash. But as the high costs mount, the struggle to cover monthly expenses is compounded by the struggle to cover the cost of the payday...

One day after the Office of the Comptroller of the Currency (OCC) rescinded its 2013 guidance to curb predatory bank payday loans, more than 230 ( updated) faith, consumer advocate, and civil rights organizations from across the country sent a letter to America's banks urging them to pledge that they will not begin making payday loans and to oppose the...

Download an overview of the main points in the Consumer Financial Protection Bureau's (CFPB) final payday loan rule.

The Consumer Financial Protection Bureau (CFPB) has issued the first part of a final national rule that addresses payday and car title lending. For years, civil rights organizations, consumer advocates, faith groups, working families, and others across the country have pushed for a rule to protect their communities from the payday lending debt trap. This rule represents another step forward...

This letter urges Congress to support the Senate and House companion bills, S. 1659/H.R. 3760, the “Protecting Consumers from Unreasonable Credit Rates Act,” sponsored by Senator Richard Durbin, Senator Jeff Merkley, Representative Matt Cartwright, and Representative Steve Cohen. The Senate and House bills would extend to all consumers a 36 percent usury APR cap. A fair rate cap will protect...

Payday lending is a high-cost loan product that is built on its ability to churn consumers through a cycle of debt, collecting fees for as long as possible. Fortunately, 15 states and the District of Columbia have made a definitive statement to prohibit high-cost payday loans by adopting interest rate caps of 36% or less. The experiences of consumers in...

Payday lending involves small‐dollar, high‐interest loans that trap consumers into a long‐term cycle of debt and fees. Payday lenders tout themselves as a needed service providing access to emergency credit. However, with weak underwriting and ability to repay standards, the payday loan model creates a debt trap that is easy to get into, but extremely difficult to escape. Each year...

Banks once drained $500 million from customers annually by trapping them in harmful payday loans. In 2013, six banks were making triple-digit interest payday loans, structured just like loans made by storefront payday lenders. The bank repaid itself the loan in full directly from the borrower’s next incoming direct deposit, typically wages or Social Security, along with annual interest averaging...

Payday and car title loans are small-dollar, high-cost products that thrive on keeping consumers in a cycle of debt. With lenders doing essentially no underwriting, consumers find it easy to obtain these loans, often marketed as a solution to financial emergency. However, the unaffordability of the loan and the lenders extreme leverage over the borrowers – either through direct access...