Payday and Other Small Dollar Loans

Lenders can and do make non-covered loans without regard to the borrower’s ability to repay as scheduled, and doing so can be highly profitable. In particular, high-cost loans provide a significant disincentive against lending based on ability to repay, even absent a coercive repayment mechanism or security. When rates are high, lenders can profit despite significant defaults and can even...

The California State Legislature and the California Attorney General, Kamala Harris, both submitted comments to the Consumer Financial Protection Bureau in favor of strengthening the proposed rule on payday and car-title lending. Download both of the letters with the link above to read the key points laid out to curb these predatory lending practices.

The Consumer Financial Protection Bureau’s (CFPB or the Bureau) proposed rule to address payday, vehicle title, and other certain high-cost installment loans marks the culmination of over four years of extensive information gathering and data analysis by the Bureau. We thank and commend the Bureau for this work, which has resulted in a robust record of evidence that strongly supports...

The Consumer Financial Protection Bureau’s (CFPB or the Bureau) proposed rule to address payday, vehicle title, and other certain high-cost installment loans marks the culmination of over four years of extensive information gathering and data analysis by the Bureau. We thank and commend the Bureau for this work, which has resulted in a robust record of evidence that strongly supports...

CRL Response to “Reframing the Debate about Payday Lending by Liberty Street Economics” Research Comment On: "Do Defaults on Payday Loans Matter?" by Robert Mann Research Comment On: "Payday Loan Rollovers and Consumer Welfare" CRL Critique of “Payday Holiday: How Households Fare After Payday Credit Bans” by Donald P. Morgan and Michael R. Strain CRL Review of "Defining and Detecting...

A recent poll conducted by Lake Research Partners and Chesapeake Beach Consulting finds overwhelming bipartisan support for strong regulation of financial services and products in order to hold financial services companies accountable and protect consumers against unfair practices. By wide margins, Americans call for tough oversight and regulation of Wall Street banks, mortgage companies and credit card servicers, as well...

The Consumer Financial Protection Bureau (CFPB) has proposed a new national rule that addresses payday and car title lending. The proposal, as written, has some useful elements, but it is seriously undermined by several major loopholes. If the loopholes aren’t closed in the final version, the rule could essentially permit payday predators to conduct business as usual. What We Can...

A recent blog post by Liberty Street Economics, Reframing the Debate about Payday Lending, mischaracterizes the debate around payday lending and downplays the harms done to vulnerable consumers. Payday lenders and their allies have referenced the blog to justify their ongoing efforts to delay and weaken much needed regulation at both the state and federal level. The Center for Responsible...

The proposed rule takes the right general approach by establishing an ability-to-repay principle – including consideration of income and expenses – at its core. This is extremely significant; while a long-standing tenet of responsible lending, it is one ignored by these abusive industries driven by unaffordable loans. It is a particularly important standard for high-cost loans where lenders have the...

The Consumer Financial Protection Bureau (CFPB) is widely expected to soon propose a new national rule that addresses payday and car title lending. If strong enough, the rule has the potential to rein in the worst abuses of these kinds of high-cost loans, which carry triple-digit interest rates. Payday lenders are pushing for loopholes in the rule that would make...