Although marketed as a quick financial fix, the long-term debt is the typical borrower experience and the core of the business model. With each loan flip or new loan, borrowers are unable to both repay the lender and have enough money left until the next payday arrives. Payday loans are a debt trap by design and lead to cascade of other financial consequences such as increased overdraft fees and even bankruptcy. A recent trend is for payday lenders to make multi-payment “payday installment” loans, which can be for larger amounts and extend the cycle of high-cost debt even longer.
The Problem
Research & Policy
Comment Letter
December 3, 2021
Testimony
November 2, 2021
Comment Letter
October 18, 2021
Letters to Congress
October 12, 2021
Letters to Congress
October 12, 2021
Testimony
July 29, 2021
Comment Letter
April 30, 2021
Policy & Legislation
April 23, 2021