New Jersey

Payday lenders charge exorbitant fees to borrowers without assessing their ability to repay, and the annual interest rates on these loans are in the triple digits.

New Jersey has long been a national leader in the fight against predatory lending which strips wealth from communities. Strong state usury laws protecting New Jerseyans from payday lending in the state save New Jerseyans over $193 million annually. New Jerseyans continue to overwhelmingly support a rate cap on payday and consumer installment loans and want to ensure the strong state laws preventing abusive practices by lenders cannot be evaded.

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 aren’t generally subject to state interest rate caps, to make usurious loans that exceed the state’s rate cap. The banks engaging in these schemes are abusing their charters and enabling predatory loans...

In the last decade, student loan debt has exploded, directly impacting the lives of millions of Americans and leaving its mark on the entire economy. There are currently over 44 million Americans with student loan debt. With the costs of higher education continuing to rise at alarming rates and a college education becoming a requirement for more and more jobs, millions more will soon be joining their ranks. Burdened by extraordinary student loan debt and stagnant wages, a generation of Americans are delaying or forgoing opportunities to build wealth, such as purchasing their first homes or...

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 to the bank account or threatening repossession of the borrower’s car - makes it very difficult to escape a cycle of debt that can last months, if not years. Debt trap products often lead to other financial harms...

This color-coded map of payday stores by household reveals a disturbing pattern. Southern states are among the most targeted for these high-cost, low-dollar loans.

On September 15th, 2004, the National Home Equity Mortgage Association (NHEMA) released a report by Professors Richard DeMong and Richard Netemeyer of the University of Virginia that asserts that New Jersey's Homeownership Protection Act of 2002 has decreased access to credit for non-prime borrowers in the state. The authors assert that non-prime lending was lower and comprised a smaller share of the total mortgage market in New Jersey than in Pennsylvania. In addition, the authors claim that borrowers in New Jersey had, on average, higher incomes and FICO scores than Pennsylvania borrowers...