Title and Payday Loans in

Florida

florida state map

Payday and Title Loans in Tennessee: Subprime Report

At a Glance
Florida Quick Facts
florida state flag
  • Nickname: The Sunshine State
  • Population: 21.3 million
  • Website: MyFlorida.com

Florida draws people from far and wide for its sandy beaches and sunny skies, along with its thriving night life and world renowned fine dining. But some Florida residents may not get to experience all that the state has to offer because they’re struggling with their finances.

In 2018, Florida’s poverty rate was about 14.0%, which is one of the highest rates in the nation (the U.S. average for 2018 was 11.8%). While Florida’s median household income of $55,462 is $6,475 less than the national average of $61,937, their credit card debt ($6,460) is higher than the average debt for folks across the rest of the country ($6,028).

When poverty is combined with credit card debt and income is not high enough, emergency cash can be hard to come by. And when times get tough, impoverished Floridians and/or those with poor or no credit are often unable to access more traditional loans or lines of credit and may be forced to take out high interest payday loans or title loans in order to get by.

Average Credit Card Debt and Median Household Income in Florida vs. the U.S.
Florida
U.S.
$6,460
$6,028
Average Credit Card Debt (Q1 2019)
$55,462
$61,937
Median Household Income (2018)

Payday Loans in Florida

Florida payday loans are small-amount loans that come with high annual percentage rates (APR) and fees. They are due on the borrower’s next payday, which is typically in 2 to 4 weeks. The borrower usually just needs to have a checking account and be able to show proof of income to be eligible for a payday loan. The borrower provides the lender with a post-dated check at the time of the original loan. If and when the borrower is not able to pay back the lender on time, the lender has the right to cash the post-dated check or take out funds from the checking account. As a result of this setup, borrowers who are not able to pay back their loans on time will often take out new loans (or rollovers), and a cycle of payday loan debt begins…

Florida is one of the U.S. states where payday lending is legal. A study by the Insight Center for Community Economic Development found that Florida’s payday lending business resulted in $76 million of lost economic activity and an estimated loss of 1,117 jobs in the Sunshine State. According to a 2016 policy brief put out by the Center for Responsible Lending, the payday loan business has consistently been on the increase from 2005 through 2015, as shown in the figures below.

Payday Loan Transactions in Floria from 2005 to 2015

 

Annual Payday Loan Transactions

Annual Volume

Total Annual Fees

2005

4.6 million

$1.73 billion

$186.50 million

 

 

2015

7.9 million

$3.13 billion

$311 million

A report by the Center for Responsible Lending indicates that there are about 5,756 loans provided by each payday loan store in Florida, resulting in 7,338,912 payday loans in the state that were given to 833,967 borrowers. In the 12 months from 2016 to 2017, Floridians took out 7.7 million payday loans (according to the Tampa Bay Times). During the 1-year period from May 2014 to May 2015, the average payday loan was for $399.35 and the average total fees that came along with these loans averaged $42.73. During this same time frame, Florida payday lenders collected more than $310 million in total fees from payday loan borrowers.

Payday Loans in Florida in 204-2015
  • Average Loan Size:$399.35
  • Average Fees:$42.73
  • Average APR:278%
  • Total Fees Extracted:$311 million

Source: “Perfect Storm: Payday Lenders Harm Florida Consumers Despite State Law” Center for Responsible Lending, March 2016. https://www.responsiblelending.org/sites/default/files/nodes/files/research-publication/crl_perfect_storm_florida_mar2016.pdf

Repeat lending clearly accounts for a significant majority of the payday loan volume in Florida. According to the 2016 policy brief put out by the Center for Responsible Lending, over 83% of the payday loans in Florida were taken out by Floridians who had 7 or more loans, and 57% of borrowers had 12 or more loans. A 2015 Veritec report notes that the typical payday loan borrower in the state takes out more than 8 loans annually, and the Tampa Bay Times says that “the 28 percent of people who receive at least 12 loans per year make up 56 percent of all payday loan transactions.”

As can be seen in the figures below, this pattern of repeat borrowing has been holding pretty steady over the years:

 

 

Loans to Repeat Borrowers in Generate Majority of Payday Loan Volume in Florida

Loans to Borrowers With…

7 or more loans per year

12 or more loans per year

 

2015

 

83%

 

57%

 

2014

 

84%

 

59%

 

2013

 

85%

 

61%

 

2012

 

85%

 

62%

 

2011

 

85%

 

63%

 

2010

 

85%

 

63%

 

2009

 

84%

 

61%

 

2008

 

83%

 

60%

 

2007

 

81%

 

58%

 

2006

 

81%

 

58%

Source: “Perfect Storm: Payday Lenders Harm Florida Consumers Despite State Law” Center for Responsible Lending, March 2016. https://www.responsiblelending.org/sites/default/files/nodes/files/research-publication/crl_perfect_storm_florida_mar2016.pdf

Florida seniors, communities of color, and low-income residents are particularly at risk of the dangerous impacts of payday loans. The Center for Responsible Lending 2016 policy brief notes that from 2005 to 2015, the percentage of payday loan borrowers who were 65 or older increased from 3.4% to 8.6% (which is a 152.9% increase!). This increase is much higher than the 9.7% increase in this age bracket across the state, and it’s particularly distressing given that seniors are, as a group, more likely to be living on a fixed income and less likely to be able to pull themselves out of payday loan debt.

The Center for Responsible Lending 2016 policy brief also notes that payday loan business locations are more concentrated in communities with a high proportion of African Americans and Latinos. More specifically, these communities have 8.1 stores per 100,000 people, while mostly White communities have only 4.0 stores per 100,000 people. We see the same type of distribution in low-income neighborhoods: 9.6 stores per 100,000 people (versus 2.4 stores in high-income areas).

Title Loans in Florida

While payday lenders loan money based on the cash you’ll earn on your next paycheck, title loans work a little differently. Title loans use something you already own and likely don’t want to give up – your car – as collateral for paying back your loan. The loan amount is based on the value of your vehicle. In Florida, if you miss a payment on a title loan, the lender can take your car and sell it. The lenders figure that the fear of losing your vehicle might motivate you into paying back your loan on time.

It’s important to keep in mind that, like payday loans, fees associated with a title loan end up being greater than the loan itself. Because people generally rely on their car to get to their jobs, title loan lenders are confident they will recoup these high fees. After all, what are you going to do? Without a car, you’ll be unable to work, and your already precarious financial situation will just get worse.

openning quote

... a car title loan I took out for $500 to help get my daughter to Atlanta to start college. For a $500 loan, I had to pay $98 every month. Halfway through the loan, my daughter needed to come home unexpectedly so I had to take out another $300 on the loan.

closing quote
- Jane Mccarthy of Opa-Locka Florida

Source: “Caught in the Debt Trap: Stories of Payday and Car Title Loan Borrowers” Fredericksen, A. (People’s Action Institute and Americans for Financial Reform), 2016. Accessed on November 14, 2019. https://peoplesaction.org/wp-content/uploads/2016/10/Caught-in-the-Debt-Trap-final.pdf

Consumer Protection in Florida

The laws that were designed to protect payday and title borrowers in Florida are only as strong as the consumers who fight against unfair lending practices. If you or someone you know has been taken advantage of by a lender, contact the authorities through one of the links below.

How to Report a Predatory Lender in Florida

If you need to report a payday or title lender to the authorities, contact the Florida Office of Financial Regulation:

You can also file a complaint with the Florida Attorney General’s Office:

You may also file a complaint with the Florida Department of Agriculture and Consumer Services, which acts as the State’s consumer complaint clearinghouse, at www.floridaconsumerhelp.com.

 

Guides to Payday and Title Lending in Florida Cities

Payday and title loans in Florida are a big issue for residents. And it gets even more complicated at the city level. Check out these payday and title loan guides to the following cities in Florida:

Jacksonville | Miami | Tampa