Payday and Installment Loans

Installment Loans || Payday Loans 

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 one to four 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 percent.

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

Policy Analysis

Installment Loans

Policy Briefs, Reports & Press Releases

• Issue Brief: FDIC/OCC Proposal Would Encourage Rent-a-Bank Predatory Lending, December 2019
• Press Release: FDIC/OCC Proposal Would Encourage Rent-a-Bank High-Cost Predatory Lending, November 19, 2019
• Press Release: Advocates Applaud Bill to Cap Interest Rates at 36%, Nov. 12, 2019
• Press Release: Advocates Urge FDIC, OCC, and Federal Reserve to Stop Banks from Helping Payday Lenders to Evade State Interest Rate Limits, Nov. 7, 2019
• Fact Sheet: Stop Payday Lenders Rent-a-Bank Schemes, November 2019
• Press Release: Groups: FDIC & OCC Are Wrong to Support Predatory Small Business Lender, Oct. 24, 2019
• Press release: Credit Union Regulator Expands High-Cost Loan Program Without Needed Safeguards, Say Consumer Groups, Sept. 19, 2019
• Fact sheet: What State Can Do to Help Consumers: High-Cost Loans, July 2019
• Fact sheets on APR rates in Southern States, May 2019
• Fact Sheet: State Annual Percentage Rate (APR) Caps for $500, $2,000, and $10,000 Installment Loans, March 2019
• Report: A Larger and Longer Debt Trap?: Analysis of States’ APR Caps for a $10,000 Five-Year Installment Loan, October 2018  Press Release
• Issue Brief: OCC’s Short-Term, Small Dollar Lending Bulletin: Vague Guidelines Leave the Devil to the Details, July 2018
• Press Release: Court to CFPB: Payday Lending Rule Compliance Date Stays Intact, June 12, 2018
• Press Release: Consumer Watchdog Mulvaney Colludes with Payday Lenders to Delay Payday Rule, June 1, 2018
• Press Release: With New OCC Guidance, Banks Must Ensure Small-Dollar Loans are Affordable, May 23, 2018
• Op-Ed: Rent-a-bank schemes trample voters’ and states’ rights by Lauren Saunders, Feb. 8, 2018
• Press Release: Consumer Financial Protection Bureau Drops Lawsuit Over 950% APR Loans, Jan. 18, 2018
• Press Release: Congress Moves to Protect Predatory Payday Lenders’ Unaffordable 300% Loans and Block Consumer Bureau’s Ability-to-Pay Rule, Dec. 1, 2017
• Press Release: Consumer Watchdog Curbs 300% Unaffordable Payday Loans, Oct. 10, 2017
• Report: Predatory Installment Lending in 2017: States Battle to Restrain High-Cost Loans, Aug. 2017

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Letters

• Letter from 61 consumer, civil rights and community groups to the OCC, FDIC, and the Federal Reserve Board re: the threat that national banks could help predatory lenders charging 135% to 199% APR to evade new California law (rent-a-bank schemes), Nov. 7, 2019 Press Release
• Coalition letter to OCC and FDIC opposing their support for predatory small business lender using rent-a-bank scheme, Oct. 24, 2019;  Press Release

Comments

• Group comments to the CFPB opposing Changes in Rules on Payday, Title and Certain Installment Loans and rescission of Ability-to-Repay Rule, May 15, 2019, Press Release; Shorter comments of 429 organizations in 46 states
• Coalition and longer comments to FDIC on small dollar loans, Jan. 22, 2019

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Payday Loans

Policy Briefs, Reports & Press Releases

• Press Release: Groups: FDIC & OCC Are Wrong to Support Predatory Small Business Lender, Oct. 24, 2019
• Press Release:  New California Law Targets Long-Term Payday Loans; Will Payday Lenders Evade it?, Oct. 11, 2019
• Issue Brief: Payday Lenders Plan to Evade California’s New Interest Rate Cap Law Through Rent-A-Bank Partnership, October 2019
• Fact sheet: What State Can Do to Help Consumers: High-Cost Loans, July 2019
• Press Release: Court Decision Signals End of Faux Tribal Payday Lending, April 24, 2019
• Fact Sheet: Stop the Debt Trap: Preserve the Consumer Financial Protection Bureau’s Payday Loan Rule, March 2019
• Policy Brief: NCLC & CRL analysis of Indiana SB 613, March 2019.
• Press release: Consumer Financial Protection Bureau Guts Rule to Rein in HIgh-Cost Short-Term Loans, Feb. 6, 2019
• Press release: Civil Rights and Consumer Groups Implore the FDIC to Say No to Bank Payday Loans and Rent-a-Bank Payday Lending, January 23, 2019
• Issue Brief: After Payday Loans: How do Consumers Fare When States Restrict High-Cost Loans? Oct. 2018
• Press Release: CFPB Payday Rule Survives Legislative Threat, Remains Intact for Now, May 17, 2018
• Press Release: Consumer Advocates Urge U.S. House Members to Halt Bank Payday Loan Legislation in Committee Markup, March 21, 2018
• Press Release: U.S. House Votes to Weaken State Limits on High-Cost Loans, Feb. 14, 2018
• Press Release: Consumer Financial Protection Bureau Drops Lawsuit Over 950% APR Loans, Jan. 18, 2018

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Letters

• Coalition letter to OCC and FDIC opposing their support for predatory small business lender using rent-a-bank scheme, Oct. 24, 2019; Press Release
• Letter from Civil Rights and Consumer Groups to Federal Banking Regulators FDIC, OCC, Federal Reserve Bank and the CFPB) Urging them to Prevent the Return of Bank Payday Loans, June 7, 2019; Related Press Release
• Coalition letter to federal banking regulators urging to prevent high-cost deposit advance loans, May 14, 2018
• Open letter to banks: Don’t Make Debt Trap Payday Loans, October 6, 2017

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Comments

• Group comments to the CFPB opposing Changes in Rules on Payday, Title and Certain Installment Loans and rescission of Ability-to-Repay Rule, May 15, 2019, Press Release; Shorter comments of 429 organizations in 46 states
• Coalition comments to the CFPB Opposing its Proposal to Delay Compliance Date for Rule Governing Payday, Vehicle, Title, and Certain High-Cost Installment Loans, March 18, 2019 || Longer coalition comments
• Group comments to the FDIC re: Request for Information re: Small-Dollar Lending, Jan. 22, 2019 Short comments signed by 88 groups.
• Coalition comments to National Credit Union Administration (NCUA) re: Payday Alternative Loans, Proposed Rule, 12 CFR Part 701, RIN 3133-AE84, Aug. 3, 2018

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Payday & Installment Policy Analysis Archive >>>

Litigation

• Amicus Brief of National Consumer Law Center, Center for Responsible Lending and Colorado Public Interest  Research in support of plaintiff in Martha Fulford v Avant of Colorado LLC et al and Web Bank, January 14, 2019
• Amicus Brief of National Consumer Law Center, Center for Responsible Lending and Colorado Public Interest  Research in support of plaintiff in Martha Fulford v Marlette Funding, January 14, 2019
• 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.