[8/10] Payday Loans Trap Borrowers

Research shows that the payday lending business model is designed to keep borrowers in debt, not to provide one-time assistance during a time of financial need. According to CRL's research, borrowers who receive five or more loans a year account for 90 percent of the lenders’ business. Our report, Financial Quicksand, shows that payday lenders cost American families $4.2 billion every year in predatory fees. Twelve states and the District of Columbia will save a collective $1.5 billion per year with an effective solution -- a cap on interest rates for consumer loans in the 36-percent range.