Most Payday Loans Are To Repay Other Payday Loans

Listen to the payday loan industry and their apologists and they’ll try to tell you that their customers are savvy and just need of a break to tide them over. But a new survey (PDF) shows that most payday loans are to repay other payday loans. Of the 80% of borrowers who take out multiple payday loans in a year:

  • 1/2 of repeat loans are opened at the borrower’s first opportunity, immediately or after a 24-hour waiting period, depending on state rules.
  • 87% of repeat loans are opened within two weeks, or generally before the next payday.
  • Only 6% percent of subsequent payday loans are taken out longer than a month after a previous loan was paid off.

Much like circus runaways who find themselves slaves to the bigtop, never able to get ahead enough to pay off their room, board and costume fees, payday lenders stoke demand for more loans with loan terms that encourage rapid re-borrowing. Once you hit the sweet spot of a borrower with a limited income who can’t or won’t generate extra income or cut back expenditures, you’ve hooked yourself a nice cow you can keep milking and milking until it shrivels – or they get a loan from another payday lender to pay you off.

Phantom Demand: Payday Lenders Create Their Own Demand With Loan Terms That Generate Rapid Re-Borrowing [Center For Responsible Lending]
Complete report (PDF)
(Photo: Tim Norvell)

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  1. tmed says:

    It is a vicious industry preying on a vicious cycle. It is a development from a time in which a standard wage only is a living wage if everything goes well. It is so difficult to develop or maintain a safety net at this time that people get pulled to these for a short fix and can’t get out.

    • Stephmo says:

      @tmed: But the Vote No Issue 5 people tried to make it seem so simple in Ohio!

      • tmed says:

        @Stephmo: I’m in Ohio, and I disliked the legislature trying to kill off the industry, but happily voted for its death when given the chance. I hate that it has found a workaround without.

        I hate that there is no competition to develop a reasonable alternative.

        • Stephmo says:

          @tmed: I meant to get another sentence in there – and it’s down below. These commercials were so insulting I couldn’t believe it.

          We were voting NO long before this started, these more than cemented it. Most people that need these are already ashamed of the situations that they’re in – and places like this prevent them from reaching out for better help either from their legitimate lenders, from programs that can help them, or from family or friends that can get them through a rough spot. These loans hope someone wants to protect their pride so much that they’ll do something incredibly stupid – like get caught in a loan cycle they’ll can never escape.

          It’s Bananas!

        • Corporate_guy says:

          @tmed: They aren’t really unreasonable. 20% interest over 2 weeks is reasonable if it’s a 2 week loan. The problem is what happens if the person can’t pay after the 2 weeks. The loan doesn’t get converted to a reasonable apr. They keep it at 20% every two weeks and the yearly rate becomes 480% compounded twice a month. So the balance grows to the point they can take you to court and take anything you own.

          They need to make is so after the initial period the loan is converted to basically a credit card interest rate. 30% with a 5% minimum payment.

  2. Skin Art Squared says:

    I’ve never really understood the “payday loan” concept. If you’re broke, why would you borrow money at 350% for a couple of days, as opposed to just waiting a couple of days and getting paid? I can’t fathom an emergency that REQUIRES you to have cash THIS INSTANT. Even a trip to the ER isn’t going to require cash on the spot, even if you don’t have insurance.

    • HRHKingFridayXX says:

      @BZMedia: The same reasoning behind when Credit Card companies gave people with no income huge credit limits. Because, somehow, they’re going to get their money back with interest, fees, or just selling it to a collector.

      • Skin Art Squared says:

        @HRHKingFridayXX: Yeah, I get why the lenders are doing it. I don’t get why anyone would agree to one.

        • Brandi Hendrix says:

          @BZMedia: unfortunately, these loans are often preying on the poor and uneducated with little or no other resources.

          It’s easy to borrow money from a friend or family member if they have it, but if your family is just as poor as you are, you might not have many options.

          I think these type of businesses should be outlawed, though. They only serve to keep the ones who need help hte most, down. I agree that most of the $ from these probably goes to landlords and utility companies, although it would be better to sit around in the dark for a couple days than pay those outrageous fees.

    • tmed says:

      @BZMedia: Food, shelter, and job. That’s what these loans protect: buying food, preventing eviction or keeping the lights on, getting a car repaired or some other ancillary need to maintain a job.

      I’m sure they get used by idiots for idiotic things, but you can bet the Electric company and landlords see an awful lot of this money.

      • johnva says:

        @tmed: But the point is that if you’re to the point where you can’t afford rent or the electric bill, the LAST thing you should be doing is taking on high-interest debt. It might relieve your short-term issue, but it creates a (literally) compounding longer-term problem. If you’re that broke, you should be desperately hanging onto every penny you make and paying what you can, not paying out your precious income to loan sharks.

        • Skin Art Squared says:

          @johnva: “…the LAST thing you should be doing is taking on high-interest debt….”

          Exactly what I was trying to say, but failed at. I’m not 100% sure, but judging from the name “Payday Loans”, I’m assuming these are very short term loans, drawn against the next paycheck. And that’s the hard part to justify for me. Payday is never THAT far away…. for most people it’s either weekly or every other week. And I realize people get into tight spots, but 350% (or whatever it is), is better than a little humility and borrowing a few bucks from a friend (or family) until payday, so you can eat?

          I don’t think payday loans should be viewed as the broke man’s credit card. But it seems like that’s exactly how they’re being used.

          • Eyebrows McGee (now with double the baby!) says:

            @BZMedia: You may not have friends or family to borrow from if you’re in a payday loan situation. We have six (SIX!) payday loan lenders in a strip on the edge of my neighborhood (the neighborhood fought a liquor license at an ethnic grocery tooth and nail, but pawn shops and payday lenders, that’s okay!) and a lot of the people going there are the only employed member of their extended family and trying desperately to stay off welfare. They don’t have friends or family to borrow from; the people who patronize this particular strip typically come from communities where welfare is the norm. (And there’s a reason they’re all on the edge of a nice, middle-class neighborhood, so they seem more like “legitimate businesses” and lower-income borrowers feel they’re more middle-class places to go.)

            Many of us have been in icky financial situations at one time or another in our lives, but maybe we didn’t have kids, or a medical problem; or maybe we had family or friends we could borrow from or get help from. That’s simply not true of everyone. A friend of mine who’s solidly middle class recently found herself on the edge of payday lenders after a go-round with her bank over her ex-husband illegally accessing her account (after 8 years of never paying child support, incidentally); her parents, who normally can help her out, are aging and were amid a medical issue so money was tight for them; and then she had a car breakdown, a kid bust through his sneakers, and normal expenses, all in the same week. She was very, very short on choices for getting her kid back in shoes so he wouldn’t be truant from school (even Goodwill requires money) and feeding her family. And she had to repair her car to keep her job; losing the job would have made the cycle worse.

            The bank and ex-husband issue would eventually get sorted, but probably not until after she had lost her job if she hadn’t been able to work with an understanding mechanic and get some help from friends.

        • Eyebrows McGee (now with double the baby!) says:

          @johnva: But if you have no friends or family to borrow from and your kids have to eat, what are your other options, if you don’t qualify for welfare or food stamps? A charitable pantry, I guess, but there’s a lot of pride-swallowing to go to one of those; I think a lot of people don’t realize how deep the payday loan will drive them, and feel it’s a more honorable way out.

          Or what if your kid needs shoes or something?

          • Stephmo says:

            @BZ Media: Key-words: Pride-Swallowing.

            We’ve made debt and cash-emergencies this thing of great shame. When the truth is that bad things happen to people all the time and that your primary lenders would much rather work with you than penalize you.

            Due dates can be moved if your payday is irregular to 5 days ahead. Food pantries are there for you – and will take your volunteer hours when you’re back on your feet. Agencies will show you how to budget your money when you don’t qualify for assistance.

            We see every day people here blaming the OP for their “stupidity” and then we see the payday loan and people wonder how come people are so stupid they use PayDay Loans.

            Well – it’s a vicious cycle. If you look down your nose at people for being in trouble with money, the shame cycle spirals out of control – so admitting the problem becomes harder than grasping at straws. The person behind the counter is offering an immediate solution that seems more self-sufficient than breaking down and admitting you need help.

            • oneandone says:

              @Stephmo: Excellently put. I don’t think it’s unique to the U.S, but there’s definitely a strong shame still attached to needing help financially. As we get destigmatize other things (like medical, sexual, or mental issues) this one persists – though it seems like the current financial situation has caused more people to realize that ‘normal’ people are not that far away from needing help.

            • The Black Bird says:

              @Stephmo: I agree with everything you have said.

              In addition you can sometimes go to one of the local places of worship to get some food and clothing or a voucher for them. There are also community outreach and social service programs available in most areas.

              The problem is none of us know how many of the people getting these payday loans are aware of the things you and I have mentioned. In this case getting the people educated as to what’s available is the key. Unfortunately I don’t see most places trying to educate the people as to what is available to help them.

          • Kimberly Gist-Collins says:

            @Eyebrows McGee (now with more baby!):

            If they need shoes that bad, Goodwill has super cheap shoes for a dollar or two. No need to take out a loan for that.

    • Jacob D. Adamo says:

      @BZMedia:

      While it’s not the wisest decision. If you have no cash, no real credit, and overextended yourself, by making bad cash decisions, to minimize the damage I would take a $100 loan with $20 interest (which is how it is out here at least) and stick it in the bank to prevent an overdraft or two at $34. To prevent the embarrassment of asking friends or family for cash and to keep myself from falling in a deeper hole.

      Not everyone has perfect credit, credit cards, etc. And while they should be responsible, sometimes things happen. These threads devolve into “omg poor people suck and are dumb because they take advantage of this stuff” but sometimes, they don’t have many options.

    • sean98125 says:

      @BZMedia:

      The emergency is that I need to get my drink on.

    • jswilson64 says:

      @BZMedia: You need to pray your thanks you’ve never been staring an electric cutoff notice in the face in August when it’s 104 degrees, and they won’t give you the 3 days slack you need until payday.

      • Skin Art Squared says:

        @jswilson64: But isn’t that also illegal? I was under the impression that in life-threatening weather, be it extreme heat or extreme cold, the electric company can’t simply cut you off.

        • humphrmi says:

          @BZMedia: It depends on the location. Don’t assume your local laws are universal. In Chicago, for instance, it’s illegal to cut off any services that provide heat in the winter, but summertime electricity is fair game. I’ve lived in some southern states where anything can be cut off at anytime for non-payment, regardless of the weather.

    • corellia40 says:

      @BZMedia: My husband and I took one out once. A few years ago, my grandmother had a stroke and was dying. We had no idea how much time she had left, and we wanted to see her while she was still alive. At the time, my husband’s employer would have given him an advance, but not until morning, and we had no way of knowing if we’d make it on time if we waited. We needed to leave that evening, and even then there was no guarantee. Banks were closed, so my mother couldn’t use her free wire transfers to send us the money. So we took out a payday loan, since the fees were actually slightly cheaper than Western Union.

      The woman at the counter was really surprised when we paid it back and didn’t take out another loan.

  3. goodpete says:

    I don’t think that payday loans are inherently bad. Just like I don’t think credit cards are inherently bad. But people need to be educated about how these things work. When I was in school (not too long ago), the only “financial” education we got was how to write and balance a checkbook. Of course, I only write checks once every month or two and my bank takes care of tracking my financial transactions quite well. So school didn’t help one bit there.

    Here’s what they SHOULD teach in consumer economics (if they don’t already):

    -How to read a credit card agreement
    -How interest works
    -How to get a mortgage (that doesn’t suck)
    -How to get a short- or mid-term loan (and how to read such agreements)
    -The pros and cons of all the above
    -Credit ratings (your _actual_ “permanent record”) ;-)

    I don’t think the answer is necessarily to outright ban payday loan services (any more than banning credit cards would take care of credit card debt or banning mortgages would solve the mortgage crisis). I think we need to make sure that students (at an early age) learn about debt, loans, and how they work. These aren’t complicated things. I believe that most people would understand a credit card agreement if they just sat down and actually read it. But they’re scared off by the small print and big words. If we teach people to actually look at this stuff, I believe people wouldn’t have so much trouble with them.

    Just a thought.

    • HRHKingFridayXX says:

      @plamoni: But payday lenders (and to a lesser extent credit cards) exist *because* so many people lack education. If I only used my credit card for a balance I could pay off, and if payday lenders really only were for emergencies, I doubt they would exist in their current form.

      • Tux the Penguin says:

        @HRHKingFridayXX: Payday loans are basically the lender of last resort for many people. What if you need cash and cannot get a loan or a credit card? There is obviously a market there and they fill it.

        That being said, even with the outrageous effective interest rate, go look at the financials of some of the public payday lenders, they aren’t making much more than normal banks/credit card companies. Ironic isn’t it?

        • Powerlurker says:

          @Tux the Penguin:

          Arguably the real last resort is pawn shops. You need to at least have a bank account to get a payday loan. Then again, at least with a pawn shop you can just cut your losses at some point by forfeiting your pawned item.

  4. Stephmo says:

    Bah, no edit – to which we said – hell yeah, we’re voting FOR Issue 5. And then it passed – and this article explains exactly why.

  5. laserjobs says:

    Sounds like a job for the government to provide more nanny state laws for those who can’t handle their finances. Also it is a lot of credit risk for those making the loans too, I wonder if we could get a government backstop so nobody loses any money to a default.

    • jswilson64 says:

      @laserjobs: They have a government backstop already. If you miss a payment or default, they deposit the check you wrote when you got the loan. When the check bounces, they file charges and you get arrested.

      Even the sub-prime lenders didn’t have the criminal justice system behind their loans.

  6. Blueskylaw says:

    Even though there’s no airport nearby, people keep landing there.
    People need to begin making hard choices such as canceling their cable and internet, stoping smoking, drinking and eating out and alot of other changes that will make life difficult for a while but will pay dividends once they get their financial house in order.

    • HRHKingFridayXX says:

      @Blueskylaw: Indeed. On the same note, I would like to see some kind of survey for what payday loans are used for. Pretty much the only thing I can see is for rent. Food- try your food pantry or church. Medications- get generics for 4 bucks at walmart; for those without generics, you can often times get a months worth from pharma companies. Everything else- live without tv and go to the library.

      • Kimberly Gist-Collins says:

        @HRHKingFridayXX: I’d like to see what they are used for too. If they are used for rent and food, then what happened to the money from their paycheck???

        Paychecks should go for necessities first. As for food, you can eat fairly healthy, fairly cheaply. Oatmeal costs pennies, pasta, frozen veggies, rice, eggs, and beans are cheap too.

  7. YouDidWhatNow? says:

    I don’t buy any excuses anyone makes for allowing this industry to exist. It’s wholly predatory, period.

    People using these services are being lazy and irresponsible with their money. And they’re being fleeced, because they’re not smart with their money.

    If you find that you *need* to get a few bucks in advance of a paycheck, check with your bank – Wells Fargo will give me a paycheck advance loan for like 10%…which is still an exhorbitant fee, but vastly better than the payday lenders. Or ask your employer for an advance. In either event, if you find yourself needing to do such things on a regular basis, the problem is with you – not your lender.

    • Brandi Hendrix says:

      @YouDidWhatNow?: I agree with you that the loans are predatory and shouldn’t be allowed to exist, but I DO NOT agree that all of the people who use them are lazy and/or ireesponsible with their money.

      You are obviously well-educated and have a good-paying job that covers your basic needs and allows you to pay your bills on time. Not everyone is so lucky. These loans prey on the uneducated lower classes who often work for minimum wage and have to make hard choices daily. Food or rent? Electricity or diapers? These are often people who cannot get a credit card or other types of loans.

      Please don’t generalize people as stupid and worthless because they use these services. They are often simply uneducated and desperate.

      • YouDidWhatNow? says:

        @Brandi Hendrix:

        …uneducated and desperate, therefore being fleeced by these companies, because they’re not smart with their money.

        They get a paycheck. They can get a free checking account at WF (or wherever). WF (or wherever) can instantly give a paycheck advance with a vastly smaller penalty to them than the payday lenders.

        And whether it’s due to their ignorance or their laziness, or both, they simply aren’t looking for better alternatives. Take away the worst-case alternative, and they’ll find the better ones.

  8. sean98125 says:

    I think the Mob offered better rates when they ran the industry instead of the MBAs.

  9. veg-o-matic says:

    @BZMedia: Sometimes payday is irregular.

    Sometimes there aren’t any family or friends with extra cash of their own to spare.

    Payday Loan places aren’t exactly clamoring for more consumer education, either. They thrive on poorly educated consumers who literally have nowhere else to turn. And wouldn’t you know it.. payday loan places love to set up shop in the more.. “economically challenged” neighborhoods. So convenient.

    It’s easy to say “I just can’t understand why they can’t wait until payday” when you’re not in that situation yourself.

    • Skin Art Squared says:

      @veg-o-matic: “It’s easy to say “I just can’t understand why they can’t wait until payday” when you’re not in that situation yourself.”

      I suppose that’s true. I’ve never used a payday loan, but I did use those Check Cashing places a few times back in ancient times when I was first out on my own after high school and had no bank account, (or any sense of what I was doing). I used to think those places were highway robbery. But it was basically for the same reason. I was uneducated (and strung out on drugs) to the point that I didn’t even have a bank account, and saw no value in having one.

    • TouchMyMonkey says:

      @veg-o-matic: Without blaming the people who take out these loans, I will say that no one should be permitted to take such obviously unfair advantage of these people. Usury is usury, no matter how you sugar-coat it, and it should have never been legalized.

  10. NeverLetMeDown says:

    Interesting actual research on the profitability of payday loans – looks like the overhead costs and default rates make it only a good, not great, business, as it is.

    [www.fdic.gov]

  11. drrictus says:

    Using one loan to pay off another…. isn’t that how the credit markets seized up?

  12. Trencher93 says:

    “SHOULD teach in consumer economics” – why would state-run schools teach sound economics when states rely on state-sponsored gambling for revenue?

    • Trai_Dep says:

      @Trencher93: Wanna bet that when local schools try to educate their kids to be smart consumers, Conservatives rally against “Socialist Teachers Hating God-Fearing Businesses”?
      I’ll lay down 2:1 odds, your favor.

    • humphrmi says:

      @Trencher93: I went to high school from 1978 through 1981 in Seattle (Go Ingraham Rams!) and they didn’t teach consumer economics then.

      I defy you to find one state-sponsored gambling venue in Washington State during those years.

    • Powerlurker says:

      @Trencher93:

      Why would a whole class need to be dedicated to this? If $out>$in, then you have a problem. I know we covered interest calculations in algebra.

  13. Mange says:

    While in college, in an area saturated with kids needing jobs, I took a position at a payday loan and car title loan store out of desperation. I felt terrible for the first few weeks. We were set up in a poorer neighborhood and had enormous lines out the door every Friday. I did at least 3 new loans every day.

    Some of the people had been customers for YEARS. They usually took out the highest loan amount, $500, which necessitated a payday payment of $88 if it was not paid off. This means that for some people, they were coming in every two weeks and plopping down $88 dollars a time to keep their loan current. I would beg these people to pay down their principal – even five dollars – and they never would. Never. I became apathetic very quickly.

    Some people have no where else to turn. I knew some of my customers had no family and no friends, so they came to me. But the place I worked and all of these places are, in fact, terrible. They DO prey on the uneducated and those without options. Landlords in these poor areas aren’t very negotiable about a late payment, food is scarce in the first place, etc. All it takes is one small financial derailment and it’s shitty deals like this for a person living check to check. And once the hooks are in, they are usually in for good.

  14. pupu says:

    I’m not in agreement that the availability of these loans is harmful to the borrower. The rates on these loans are very high, that is because a loan such as this made to a borrower with a poor payment history and low capacity to repay is basically building a house of cards – the fees and interest cause a repeating cycle of debt that will end in default in almost every case. It is not good for the borrower, but I would rather have money to prevent getting evicted and have to deal with some collection calls and worse credit than be out on the street. For lenders to be able to justify loans to people in bad circumstances the rate of return has to be high enough that they can reasonably expect to profit given the expectation that there will eventually be a default.

  15. JGKojak says:

    These should be illegal, period. We do not live in a libertarian utopia- we have laws. We have laws against the mafia from making similar types of loans- its called loan-sharking. The only difference here is that they don’t send Paulie Walnuts to beat you up if you don’t pay up.

    Guess what- all these “desperate” people find other ways to figure out their money situation- what the payday loans people do is what is called “enabling”.

    again, it should be illegal, period.

    • NeverLetMeDown says:

      @JGKojak:

      Please define the terms under which you would allow people to borrow money. Be specific (term of loan, fee, APR, etc.). Explain why those terms are reasonable, but ones slightly more stringent are not. Thank you.

      • HRHKingFridayXX says:

        @NeverLetMeDown: This is a loan against your paycheck, which is fairly constant. At a certain percent interest (math wonks, help me out), the loan becomes either unpayable or so difficult to pay off that you’re stuck paying interest for quite some time. If this is your only choice for a loan, then you can’t argue that there’s any kind of free market. In theory, this should make it so payday loans aren’t common, but since we don’t have much of a social safety net, people are desperate for money.

        • NeverLetMeDown says:

          @HRHKingFridayXX:

          “If this is your only choice for a loan, then you can’t argue that there’s any kind of free market.”

          Sure there’s a free market – there are a wide range of lenders willing to loan you the money. Just because you don’t like the _price_ of a product doesn’t mean there isn’t a free market. There’s a free market for cars that go 200mph – nobody’s stopping you from entering that market selling one – but that doesn’t mean anyone will sell you one for $5k.

  16. chuloallen says:

    As much as we hear about Payday loans and the such. What about mortgages? Borrow $100,000 pay back $300,000?
    Oh yea, second mortgages to pay off the first also..

    Loans are not bad, but when they make 3x the amount they loan out, i think there is an issue. Payday or Banks, they do the same thing

  17. johnfrombrooklyn says:

    You have to realize that many poor people do not have elementary math skills to understand concepts like interest rates. Poor people often live in the “here and now” and don’t think about even the immediate future. So if you give someone the option of buying a $500 TV and paying for it at once or paying for the TV $100 per month for 12 months, a poor person will choose the latter because he has $100 in his pocket now and he can get the TV now. Even though he will end up spending $1200 for a $500 TV. Why do you think so many poor people play the lottery? They don’t possibly understand the odds against winning. So posts like this where you try to pick apart the annual interest rates of payday lenders means nothing to the guy that can’t figure out that give up 20% of his paycheck is a huge rip off. Sorry to be crass but it’s true.

    • DefineStatutory says:

      @johnfrombrooklyn:

      Excellent point. Your average lower income person could put aside 100 a month for 5 months to buy a TV, but they’re more likely to go to rent a center and pay 100 a month for a year, because it satisfies the instant gratification that we all love.

      No real education on finance in schools, plus the society and media driven “get it today” mentality = bad thigns man, bad things.

    • Nick_S says:

      @johnfrombrooklyn: You’re 100% right. It’s not the interest rate, it’s the decision making that makes people “poor”.

      The only answer is education.

  18. albear says:

    Profiteering from the poor also like the shady rent to own scams.

  19. Nick_S says:

    You can charge a 1000% interest, but if the person does not pay, you make nothing. People don’t realize the amount of bad loans in this industry. The good loans have to cover the bad loans.

    With that being said, regulation is good, but it can’t put lenders out of business.

  20. destruktolux says:

    I live in Arkansas and payday lenders ARE illegal here. It’s one of a few things that I’m honestly proud of this state for doing. It’s largely ACORN that campaigned for this, from what I understand, and I’m sure they’re working on this in other states.

    Times are tough but payday lenders do virtually nothing to improve the situation. The point of the article, clearly, is that few people use this as a solution for immediate debt problems and most people get trapped in an endless cycle of very costly debt.

  21. TruthAboutPDL says:

    I think it’s time — again — to educate Ben Popken and the readers about payday loans. All I see are the same old criticisms, yet nobody seems to examine the truths about payday loans.

    For starters, just because an entity is called the “Center for Responsible Lending” doesn’t mean it’s some altruistic entity looking out for people. A little research would show that they are nothing more than a PR front for the Self-Help Credit Union. The CRL’s goal is to legislate payday loans out of business so as to capture those millions of consumers for their credit union.

    And — surprise, surprise — credit unions derive all of their net income from overdraft fees. The FDIC report cited below provided unequivocal evidence of this, as does a study by Bretton Woods, the bank analysis firm — the CEO of which pioneered overdraft protection and now regrets it.

    [www.rtoonline.com]

    Summary of Bretton Woods report:

    [rtoonline.com]

    As for all you naysayers, there’s a simple truth: there is a need for short-term credit in this country. This short article points out those alternatives. Payday loans are neither the most nor least expensive.

    [www.bloggernews.net]

    There’s plenty more out there, including studies by Donald Morgan at the NY Federal Reserve that shows that consumers are unquestionably harmed if payday loans are benned:

    [www.newyorkfed.org]

    Anyone who has a brain, and doesn’t want to be duped by a corrupt “non-profit” like the CRL will do their own due diligence and their own thinking. The facts are very clear. Payday loans work. 94% are paid off on time, and that is readily known from SEC filings of the public companies.

    Use your mind. Don’t let others pollute it.

  22. Anonymous says:

    Really? Since when is the Center for Responsible Lending a reputable source for accurate news and information? The Center for Responsible Lending is backed by banks and credit unions and will skew any data to get the results that they’re looking for. The Center for Responsible Lending has much to gain by putting the short-term loan industry out of business. You should do a little research on the overdraft protection product that their credit unions offer…Payday loans are for those who can use them in moderation and not those who take out multiple loans to support their lifestyle and then blame the institution when they’re in over their head.
    http://www.activistcash.com/organization_overview.cfm/oid/489

  23. Anonymous says:

    This accusation is completely false. over 90% of consumers pay back their loans on time and CFSA takes measures to educate their consumers and ensure that they can pay back their loans. If consumers can’t pay back their loans, they are of no benefit to the payday lending industry. It is pointless for a payday lender to do anything but ensure their loans are paid back or else they lose money.

  24. Steven Francis says:

    I do not support this point as this is the customers willingness to go for loan. As far as i know most of the payday loans provider tells customer before giving the loan the amount they will have to repay. If a customer is ready for loan even after that then it is his duty to repay it on time. The problem basically arises if the customer crosses his repayment time. The amount builds like anything and the customer is forced to go for other lender to payback his previous lender.