Chapter 2: The Predatory Effect of Payday Loans

impact


Now that you’ve met the players, it’s time to learn more about the game. From coast to coast, predatory lenders are targeting low-income communities with their dangerous, high-cost loans. Even though these types of loans are banned in many states, there are also many areas where they are barely regulated at all. Did you know that in Missouri you can get a payday loan with an APR that’s nearly 2,000%? Or what about Texas, where payday lenders are exploiting legal loopholes to have borrowers who default on their loans thrown in jail? And in Virginia, title lenders are issuing misleading “consumer finance” loans that allow them to raise their interest rates even higher?10

In this chapter, we’re going to explore the realities of a country where predatory lenders are allowed to run rampant. To begin, let’s talk about how easy it is for the victims of predatory lending to fall into…

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