Payday loans, or small, short-term loans due typically at the borrower’s next paycheck, are notorious for trapping financially vulnerable consumers into a cycle of debt. Woodstock Institute supports the newly released (Oct.5, 2017) rule from the Consumer Financial Protection Bureau (CFPB).
THE CFPB RULE
The rule imposes limits and conditions on payday lenders in an effort to protect borrowers from falling into a cycle of debt. By requiring a “full-payment test,” payday lenders will be required to make an upfront assessment of a borrower’s ability to repay their loan.
Read the full CFPB rule
Read the CFPB fact sheet
Woodstock Institute has a long history of both research and advocacy work surrounding predatory lending. Below you will find a selection of materials—research reports, press releases, letters, and expert testimony— from our involvement on the issue.
Read our Illinois-specific fact sheet "Support New National Payday Loan Protections"
Recent Woodstock Press Releases
October 13, 2017
October 5, 2017
July 28, 2017
December 21, 2016
June 3, 2016
July 21, 2015
Woodstock Research Reports
October 28, 2015
This study examines the auto title lending industry in Illinois. Auto title loans are a type of high-cost, small-dollar loan. They are similar to payday loans, but are secured by the title to the borrower's automobile. Title lenders operate in 25 states across the country, and each year an estimated two million American consumers take out title loans. This report examines data from two reports on the consumer lending industry released by the Illinois Department of Financial and Professional Regulations (IDFPR) and loan-level data from court records of collection cases filed in Cook County.
June 3, 2013
For years, community groups and advocates around the country have waged pitched battles to eliminate payday lending in their respective states. Notwithstanding extensive documentation of the payday lending debt trap and the billions of dollars payday lenders have systematically stripped from low-income families and communities, especially those of color, the payday lending industry has cannily built and exerted its political power in state capitols throughout the U.S. As a result, many states permit usurious payday lending, with often dire consequences for millions of payday loan borrowers already struggling to make ends meet.
March 19, 2009
April 25, 2008
November 13, 2007
September 28, 2006
February 15, 2005
May 8, 2001
March 7, 2000
Woodstock Letters & Testimony
October 7, 2016
This comment letter was submitted to CFPB on October 7, 2016. It expresses Woodstock's support for the Bureau's proposed payday lending rule as well as recommendations on the part of Woodstock Institute and the Monsignor John Egan Campaign for Payday Loan Reform as to how the rule might be strengthened. These recommendations include applying the ability-to-repay standard to all loans, extending the loan cooling-off period to 60 days, and the establishment of a limit on total days of borrowers' indebtedness.
October 23, 2013
Testimony of Spencer Cowan before the Consumer Financial Protection Bureau field hearing on the impact of the Credit CARD Act. Cowan thanked the CFPB for enforcement actions against credit card issuers and urged them to assess the pricing of add-on products and restrict up-front fees. Cowan also recommended that the CFPB enact consumer protections for all high-cost small-dollar loans, including installment loans and auto title loans.
Prepared by Illinois People’s Action, with support from various national consumer advocate groups
Published under IL Gov. Rauner's Department of Financial and Professional Regulation (IDFPR)
Senator Dick Durbin (D-IL) Bill to establish 36% usury APR cap on all loans. The proposal would amend the Truth in Lending Act.
Published September 20, 2017 by Center for Responsible Lending (CRL)
Prepared by Illinois People’s Action
Analysis prepared by Center for Responsible Lending (CRL)
Published May 16, 2017 by Center for Responsive Politics
Published March 22, 2005 by Center for Responsible Lending
Statistics based off 2015 FDIC National Survey of Unbanked and Underbanked Households
Published August 2016 (September 2017 update) by the Center for Responsible Lending
Published January 22, 2015 by the Center for Responsible Lending