Tell federal regulators to stop bank payday lending

Written by Dan Fair on April 2, 2013 - 3:19pm
Our friends at the Center for Responsible Lending (CRL) are gathering signatures for a letter to federal banking regulators urging them to stop banks from offering damaging payday-style loans. The letter, which will be sent to leaders of the Federal Reserve, Consumer Financial Protection Bureau, Federal Deposit Insurance Corporation, and Office of the Comptroller of the Currency, outlines some of the most debilitating effects payday loans have on borrowers. No matter where they originate, these loans often carry interest rates (APRs) of up to 400 percent, trapping borrowers in a debt cycle that CRL says lasts an average of 175 days. 

We have written to regulators manytimes saying that bank payday loans have the same effect on communities as storefront payday loans. Our own research shows that payday loans disproportionately affect low-wealth families and communities of color.

Banks often get around state usury regulations using loopholes in the definition of payday lending. It’s time for regulators to get serious about closing these loopholes and regulating the payday loans offered by banks.

Sign onto CRL’s letter and voice your support for financially sound communities.

Learn more about bank payday lending