State Rate Caps for $500 and $2,000 Loans
Bar graphs showing the Annual Percentage Rate Caps for $500 and $2,000 Loans
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Bar graphs showing the Annual Percentage Rate Caps for $500 and $2,000 Loans
States are grappling with how to regulate earned wage advances (EWAs) and other fintech cash advances that purport not to be credit. These loans often closely resemble payday loans, with fees that multiply into rates above 300% and cycles of reborrowing that result in workers paying to be paid. State legislatures and regulators should not…
Read More about State Recommendations for Earned Wage Advances and Other Fintech Cash Advances
Data collected by the California Department of Financial Protection and Innovation (DFPI) on earned wage advances and other fintech payday loans show a cycle of repeat use and high costs typical of traditional payday loans. DFPI analyzed data covering nearly 6 million transactions by California consumers from seven companies. Three companies had a tip-based model…
The debt trap caused by short-term payday loans is well known. Payday and car title lenders are now increasingly moving into high-cost longer-term installment loans and lines of credit that can be a deeper and longer debt trap. Both short- and longer-term payday and title loans rely on high interest rates and coercive tactics to…
Read More about What States Can Do to Help Consumers: High Cost Loans
Payday lenders and high-cost installment lenders offer fast cash loans that do far more harm than good, adding to rather than alleviating financial distress. As a growing number of states have curtailed high-cost lending, experience shows that people are better off and find better options. The American public, on a bipartisan basis, strongly supports capping…
Read More about After Payday Loans: Consumers Find Better Ways to Cope with Financial Challenges
The Veterans and Consumers Fair Credit Act will cap interest on personal loans at 36%. Predatory, high-interest loans do not help people, they only put people deeper in debt and make problems worse. There are no easy answers to not having enough money, but consumers can and already do make use of a wide range of safer and more affordable options when times are tough.