Marketed as a way to help consumers pay the bills until their paychecks arrive, payday loans trap consumers in terrible cycles of debt, dragging their families more deeply into financial crisis. In return for a loan, the consumer provides the lender a post-dated check for the amount borrowed plus a fee. The check is held for 1 to 4 weeks (usually until the customer’s payday) at which time the customer redeems the check by paying the face amount or allowing the check to be cashed. Payday lenders encourage their customers to get on a debt treadmill by refinancing one payday loan with another. The fees for payday loans are exorbitant with effective interest rates that can top 1,000%.

The repeal of usury laws has allowed payday loans and other predatory lending to flourish.


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Policy Briefs & Fact Sheets

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Comments & Testimony

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  • Group letter to OCC Opposing Proposed Rule to Pressure Banks to Support Predatory Lending, January 4, 2021
  • Coalition letter to the CFPB Opposing Payday Disclosure Testing, December 14, 2020

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Press Releases

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  • Amicus brief: Community Financial Services Assoc. of America and Consumer Services Alliance of Texas v. CFPB and J. Mulvaney
    NCLC joined AFR, CRL and PC seeking to oppose the joint motion of the CFPB and the payday industry representatives to stay both the litigation and the implementation date of the rule.

Payday & Installment Policy Analysis Archive >>>