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Ending the Cycle of Evasion: Effective State and Federal Payday Lending Enforcement

November 23, 2015
Research

Payday loans – whether made online, in stores or by banks – are designed to trap individuals in long-term debt. Data consistently show that the majority of payday loan revenue comes from repeatedly churning borrowers, and that borrowers are typically indebted for most of the year. Recognizing the damaging structure of payday loans and their devastating impact on families' financial well-being, the trend among policymakers has been to rein in this abusive debt trap using a variety of available tools. Today, 20 states and the District of Columbia either prohibit high-cost payday lending or have significantly curbed the payday debt trap.