Payday and Other Small Dollar Loans

A coalition of national consumer and civil rights groups wrote letters to three top banking regulators – the FDIC, OCC and Federal Reserve – on the importance of preventing the reemergence of debt-trap bank payday loans. View the letter to the FDIC, letter to the OCC, and letter to the Fed. These letters were signed by Americans for Financial Reform...

The Center for Responsible Lending (CRL), as part of a coalition of civil rights, consumer, and labor groups, submitted an official comment letter to the Consumer Financial Protection Bureau (CFPB), excoriating CFPB Director Kathy Kraninger’s plan to gut a 2017 CFPB rule that was issued to stop payday loan debt traps. The coalition’s comment letter, submitted on the last day...

On April 30, 2019, the House Financial Services Committee’s Subcommittee on Consumer Protection and Financial Institutions convened a hearing on “ Ending Debt Traps in the Payday and Small Dollar Credit Industry.” Download the full written and oral testimony of CRL's Diane Standaert below: Download the full testimony. (PDF) Download the oral testimony. (PDF) Watch Diane Standaert's opening statement and...

Payday and car-title loans typically carry annual percentage rates (APR) of at least 300%. These high-cost loans are marketed as quick solutions to a financial emergency. Research demonstrates, however, that they frequently lead to debt that is nearly impossible to escape. In addition, these loans are related to a cascade of other financial consequences, such as increased overdraft fees, delinquency...

Although marketed as quick cash for financial emergencies, payday and car-title loans typically become long-term debt that drains hundreds of dollars—if not thousands—from consumers. These small dollar loans carry average annual percentage rates of 391% that make it very difficult to escape a cycle of debt that can last months or years. Either through direct access to borrower bank accounts...

The organizations listed below submitted this comment letter to the Consumer Financial Protection Bureau (CFPB) on its new leadership’s proposed delay of a 2017 rule the agency had issued to stop payday and car title loans from trapping consumers in debt. The letter rebuts the CFPB’s rationale for proposing a 15-month delay of the payday rule, which the agency is...

SB 613 increases the rates for existing consumer loans in Indiana, adds additional high-cost loan products to the marketplace, and significantly increases the rates that are considered to be criminal loan sharking. For each of these changes, lenders are provided extraordinary leverage over the borrower, are able to structure the loans in a way that incentivizes repeat re-borrowing, and are...

In early February 2019, the current Consumer Financial Protection Bureau (CFPB) Director Kathy Kraninger released a proposal to gut the CFPB’s 2017 rule aimed at stopping payday and car title loans from trapping people in debt. Director Kraninger’s plan would repeal the heart of the 2017 payday rule, which generally requires that lenders determine a borrower’s ability to repay a...

The following provides an overview of Consumer Financial Protection Bureau (CFPB) Director Kathy Kraninger’s proposal to repeal the CFPB’s 2017 rule aimed at stopping the debt trap of payday and car title loans. This document includes the Center for Responsible Lending’s (CRL’s) initial analysis of the purported rationale for the repeal. As we further consider the proposal, our reactions may...

A 30-minute documentary produced by the Center for Responsible Lending, in cooperation with South Dakotans for Responsible Lending Before November 2016, payday and car title lenders in South Dakota charged annual interest rates up to 574%, trapping people in debt and often ruining their financial lives. The state legislature wouldn't pass reform, so South Dakotans put a 36% interest rate...