Payday and Other Small Dollar Loans

For most of Michigan’s history, state laws prevented payday lenders from operating, most recently by limiting interest on consumer loans at 25%. However, in 2005, Michigan became the last state to authorize payday lending when payday lenders pushed for a carve out allowing them to charge rates of 340% APR or higher. Payday lenders drain over $103 million in fees...

Morning Consult conducted a survey, commissioned by Center for Responsible Lending, of approximately 10,000 registered voters. The poll is presented as a short Powerpoint-style slide deck with key takeaways, charts, and maps. Key findings include: Two-thirds of voters (66%) are concerned about the ability of high-cost lenders to arrange loans through banks at rates higher than the state laws allow...

Borrower story from the testimony of Graciela Aponte-Diaz: California borrower story: I currently have an installment loan in the amount of $2600.00 from Speedy Cash . . . . At the same time, I also have [x] $300.00 payday loans from [x] different storefronts in my neighborhood, including Speedy Cash. So basically, I have both a $300.00 payday loan from...

We, the consumer and civil rights groups named above, write to strongly oppose the Federal Deposit Insurance Corporation (FDIC)’s proposed rule on Federal Interest Rate Authority (proposal or proposed rule). The proposed rule would allow predatory non-bank lenders to route their loans through banks to evade state interest rate caps. The proposal is outside the FDIC’s statutory authority; it is...

The undersigned community, consumer, civil rights, faith and small business organizations write to strongly oppose the FDIC’s proposed rule on “federal interest rates,” which threatens to eviscerate state interest rate limits around the country and encourage the spread of predatory lending. Download the letter to continue reading. (PDF)

The Center for Responsible Lending and the National Consumer Law Center (on behalf of its low income clients), as part of a coalition of consumer and civil rights groups wrote the comment letter included on this page, which details the groups' strong opposition to a proposed rule from the Office of the Comptroller of the Currency (OCC)’. The proposed rule...

From the letter: Interest rate limits are the single most effective tool states have to protect their residents from predatory loans. Predatory loans include payday and car title loans that often carry annual interest rates as high as 300% or more. Predatory loans also include high-cost installment loans and lines of credit with rates approaching and well exceeding 100%. These...

From the introduction of the brief: Since the founding of our nation, states have limited interest rates as the primary protection against predatory lending. Evasions of usury laws are as old as the laws, but courts consistently look beyond form to the substance of the transaction to prevent subterfuge. Ever since banks were provided with legislative exemptions from state usury...

From the introduction of the brief: Since the founding of our nation, states have limited interest rates as the primary protection against predatory lending. Evasions of usury laws are as old as the laws, but courts consistently look beyond form to the substance of the transaction to prevent subterfuge. Ever since banks were provided with legislative exemptions from state usury...

A few high-cost lenders are evading state consumer protections through rent-a-bank schemes. Through these sham arrangements, these companies are exploding right through the interest rate limits that most states have put in place for good reason, to protect people from high-cost debt traps that drain them of their hard-earned income. In the following states, payday lenders are using banks, which...