Woodstock Institute and the Public Action Foundation are pleased to release Hunting Down the Payday Loan Customer: The Debt Collection Practices of Two Payday Loan Companies, a new study that examines the court records of borrowers taken to court by two companies now offering new payday installment loans.

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  Hunting Down the Payday Loan Customer: The Debt Collection Practices of Two Payday Loan Companies

1. The Payday Loan Reform Act is working. Since the passage of the Act, the fee cap and other consumer protections have reduced the cost of borrowing the average payday loan by a 39 percent decrease. Also, the Illinois Department of Financial and Professional Regulations, which regulates payday lenders, has issued dozens of enforcement actions and levied hundreds of thousands of dollars of fines against payday lenders.
2. Payday lenders are working hard to evade the Payday Loan Reform Act offering payday installment loans instead which are expensive and dangerous. Since the Payday Loan Reform Act regulates loans of 120 days or less, the Illinois payday loan industry increasingly marketed and offered their customers payday installment loans with terms of 121 days or more. These new “look alike” loans, called payday installment loans, have many of the same features as installment loans offered before the Act, but with a significantly higher price tag.
3. One out of every three Cash Store customers refinanced or "rolled over" their loan.
4. Women made up a large portion of payday loan borrowers taken to court. Of the Americash cases reviewed, 72 percent of the defendants were female. Of The Cash Store cases, 66 percent of the defendants were female.
5. Americash and The Cash Store court cases are heavily concentrated in minority communities. Nearly 70 percent of Americash borrowers with pending or complete court cases because of default were in low or moderate-income, predominately minority ZIP codes, with nearly 90 percent of cases located in predominately minority communities of any income.