Predatory loans impact families, businesses & communities

A new report in the Making Ends Meet series by the Consumer Financial Protection Bureau, finds that consumers who use a payday, auto title, or pawn loan in one year are often still using that type of loan a year later. Some users of these services have lower cost credit available on credit cards, while others lack access to traditional credit. Among payday, auto title and pawn loan borrowers who experience significant financial shocks, the costs of these shocks often exceed other possible sources of funds. 

Each year the state of South Carolina releases a report with anonymous details about all payday loans issued statewide. The report includes the number of loans issued, average amounts, interest & fees, and other details. 

To help consumers put recent changes into perspective, the Center for Responsible Lending analyzed the average APR for a $300 loan in each state based on a 14-day loan term. Generally, payday lenders levy a “finance charge” for each loan, which includes service fees and interest, so many times consumers don’t always know exactly how much interest they’re paying.

In 2020, Sisters of Charity Foundation partnered with the Rural & Minority Health Research Center at the University of South Carolina to conduct research that quantitatively assesses the factors that contribute to poverty throughout the state.  

A panel discussion about the harm caused by predatory lending in SC and practical ideas on how to address the problem. Presented by SCACED as part of the 2020 Opportunities South Carolina Conference.

 CRL conducts in-depth research on the extent and impact of predatory lending, to provide useful information to consumers, community advocates, and policymakers alike. We also share our market and legal knowledge with advocates and policymakers across the nation interested in reforming lending practices and frequently respond to regulators' requests for comments on lending issues. 

Morning Consult conducted a survey, commissioned by Center for Responsible Lending, of approximately 10,000 registered voters. The poll is presented as a short Powerpoint-style slide deck with key takeaways, charts, and maps. 

Each year, 12 million borrowers spend more than $7 billion on payday loans.

This report—the first in Pew's Payday Lending in America series—answers major questions about who borrowers are demographically; how people borrow; how much they spend; why they use payday loans; what other options they have; and whether state regulations reduce borrowing or simply drive borrowers online.

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 on other bills, involuntary loss of bank accounts, and even bankruptcy. For car-title loans, the end result is too often the repossession of the borrower’s car, a critical asset for many people. 

Each year the SC Department of Consumer Affairs publishes a report on the lending marketplace in the state. It provides information and analysis of existing and emerging trends. 

About 12 million Americans use payday loans each year, but new research shows these short-term loans could be making borrowers sick.

In SSM - Population Health, IPR biological anthropologists Christopher Kuzawa and Thomas McDade outline how payday loans are associated with greater anxiety and more inflammation, which could be a sign of health problems. 

 In the United States, credit score and payday lending systems have significant implications for public health and racial equity. In 2018, health researchers showed for the first time that using payday loans was associated with poor health, adding to a well-established literature on overindebtedness and adverse physical and mental health.