Latinos, Blacks and Seniors Targeted for High-Cost Loans

Floridians have paid more than $2.5 billion in fees on high-cost payday loans over the last decade, according to new research by the Center for Responsible Lending (CRL). Further, in the most recent reported one-year period, June 2014 through May 2015, over $311 million in fees was paid on loans averaging nearly $400. These and other findings from a report entitled, Perfect Storm: Payday Lenders Harm Consumers Despite State Law refute recent claims that an existing state law has protected consumers in the Sunshine State and should be used as a model for the nation.

Today, CRL joined the National Council of La Raza (NCLR), Latino Leadership, Inc. and the Florida Alliance for Consumer Protection in a telephone press briefing where experts examined how Florida's payday lending regulations fail to safeguard borrowers, allowing lenders to target communities of color.

"Our analysis shows that the law has done nothing to stop the debt trap," said Brandon Coleman, co-author of the report and a CRL policy counsel. "With 83% of payday loans going to people stuck in 7 or more loans per year, it's easy to see how Florida's law is failing consumers."

The persistent pattern of repeat lending in Florida occurs despite the 2001-enacted Deferred Presentment Act, a state law that limits borrowers to only one loan at a time and includes a 24-hour wait period between loans. Passed with bipartisan support in the legislature along with that of the payday industry, today payday lenders in Florida are more commonplace than Starbucks' 642 coffee shop locations and charge on average 278% annual percentage rate (APR).

Some communities are hit harder by payday lenders than others. The report shows payday lenders concentrating in Florida's Black and Latino communities, even when accounting for income. During the decade-long study period, the share of payday loan borrowers age 65 or older more than doubled, although the share of the state's senior population grew less than 10% in that same time period. "Payday lenders set up shop in vulnerable communities because they know there are people who have nowhere else to turn and who will be easy targets," said Marucci Guzman, Executive Director of Latino Leadership, Inc. "For lawmakers who say that these regulations are working, I would ask whether they would ever tell their mother or father to take out a payday loan. If these loans are not good enough for their families, why should they allow payday lenders to continue to take advantage of our communities?"

"This payday storm has pummeled the state for over a decade with no signs of relief," added Delvin Davis, a senior researcher with CRL and report co-author. "Given what we see in Florida, whenever we hear ‘payday best practices', we can assume that only means what is best for the payday lenders, not what's best for consumers."

Asari Fletcher of the Florida Alliance for Consumer Protection said the report affirmed what many in Florida experienced for far too long. "I have seen first-hand, how Floridians of all walks of life have joined together to prevent lending abuses in our communities," Fletcher stated. "In particular, we have called on our state lawmakers to reduce the excessive cost of these loans, and for strong federal rules to prevent the debt trap."

At the federal level, the Consumer Financial Protection Bureau (CFPB) is expected to soon finalize its rulemaking on small dollars loans – including payday. For nearly two years, CFPB has engaged stakeholders in Alabama, Tennessee and Virginia, as well as forming advisory bodies that include small business representatives.

"Federal regulation designed after Florida's payday law would continue to line the pockets of payday lenders with borrowers' hand-earned wages," noted Marisabel Torres, senior policy analyst at the National Council of LaRaza (NCLR). "Struggling communities and minority borrows cannot afford to be targeted with products that are designed to drain their wealth. We need a strong payday rule that will end the debt trap once and for all."

For more information, please contact:

Charlene Crowell

Joe Rendeiro


The Center for Responsible Lending, a nonpartisan and nonprofit organization works to ensure a fair, inclusive and transparent financial marketplace for all consumers. It is an affiliate of Self-Help, one of the nation’s largest nonprofit community development lenders.

NCLR, the largest national Hispanic civil rights and advocacy organization in the nation, works to improve opportunities for Hispanic Americans.