Payday and Title Loans in

Las Vegas, NV

The State of Nevada

Las Vegas Payday Loans: Subprime Report

In June, Nevada governor Brian Sandoval signed a new law that aims to limit dangerous payday lending in the Silver State. Under the new regulation, lenders are given new tools to ensure borrowers actually have enough money to pay back the loans they’re getting.[1]

It was an important step in the right direction, but not everything Las Vegas residents and lawmakers hoped for. Several other bills proposed in 2016 and 2017 would have provided more meaningful restrictions. Las Vegas Review-Journal columnist Steve Sebelius was troubled by the failure of several bills that would have created a state database of payday lenders and limited the number of payday loans lenders could offer to the same person. “Payday loan abuses need to be addressed,” he said, and this approach “was an eminently reasonable one.”[2]

There are no caps on interest rates for payday loans in Nevada—the average is an eye-popping 652 percent[3]—and no limits on the number of loans payday lenders can issue to the same struggling person. Unlike neighboring Henderson, Las Vegas has no restrictions on the number of payday lending stores that can open in the city or where they can be located.[4] In fact, there are a huge number of payday lending stores in the city: 375.[5]

Here, we’ll explain why these loans are so dangerous for Las Vegas residents, and some ways to avoid them.

Quick Fact Quick Fact

Las Vegas is home to 375 payday lending storefronts[36]

A Timeline of Predatory Lending in Las Vegas and Nevada
  • 1984:Nevada’s state legislature abolishes the 18 percent interest rate cap on small lenders
  • 2005-2007:Nevada lawmakers pass laws limiting abusive collection practices among payday lenders and restricting interest rates under certain circumstances, but lenders soon find workarounds
  • September 2013:The nonprofit Center for Responsible lending publishes a report listing Nevada among the US states with “no meaningful regulation of payday lending”
  • 2016:The Center for Responsible Lending issues a report showing the average interest rate for a payday loan in Nevada is 652 percent
  • August 2016:The Las Vegas Review Journal publishes on an article on the dangers faced by Las Vegas residents who take out payday loans
  • June 2017:Nevada governor Brian Sandoval signs into law a bill that prohibits payday lenders from making loans without first making sure the borrower actually has the ability to repay them
Quick Fact Quick Fact

The typical interest rate for a payday loan in Nevada is 652 percent[37]

Introducing Las Vegas

In many ways, the city of Las Vegas needs no introduction. With its casinos, hotels, entertainment, and nightlife, the city draws visitors from all over the world. Las Vegas is the economic hub of the state of Nevada and home to a majority of the state’s population.[13]

Although it’s a tourist mecca, Las Vegas’s permanent population of 632,912[14] also faces serious problems, such as crime, substance abuse and poverty. For instance, 22 percent of the population lacks health insurance, 17.5 percent live in poverty, [15] and 5.2 percent are unemployed.[16]

Quick Fact Quick Fact

Payday lenders collect $77,725,835 in fees from Nevada borrowers every year[38]

Payday Loans in Las Vegas

Like many states, Nevada has more payday lending stores than it does McDonald’s.[17]  There are a whopping 375 payday loan storefronts in Las Vegas alone.[18] As a result, it’s extremely easy to receive a payday loan. In fact, you could argue it’s a little too easy.

To receive a payday loan, the borrower writes a postdated check for the amount of the loan plus fees. The check will be deposited at the end of the loan term (typically 14 days) unless the borrower pays the total balance back in cash instead. If there’s not enough in the borrower’s checking account to cover the cost, payday borrowers may attempt to deposit the check in smaller increments until something clears. Each of those attempts can trigger overdraft fees—and given that some banks charge $34 per overdraft,[19] this practice can easily cost consumers hundreds of dollars.[20]

Borrowers who can’t pay their debt when the loan is due can choose to “roll over” the loan (pay a fee for a two-week extension) or renew it (immediately take out a new loan to cover the last one). According to a study from the Consumer Financial Protection Bureau, 80 percent of payday loans are either rolled over or renewed—racking up huge fees in the process.[21]

Nevada has “no meaningful regulation of payday lending,” according to the Center for Responsible Lending. [22] That means there’s absolutely no limit to how much interest lenders can charge for a $300 loan over a two-week pay period.[23] And without a cap on interest rates, “consumers can pay double of what they originally borrowed, which keeps them in the cycle of poverty,” Nevada deputy state treasurer Sheila Salehian explained in 2016.[24]

openning quote

It’s embarrassing to have to explain to them what you’re going through.

closing quote
- Harold Carnes, Las Vegas Payday Loan Borrower

Las Vegas Payday Loan Borrower Story

Harold Carnes was in a tight spot. The Las Vegas resident was working at McDonald’s making $8.25 an hour and struggling to make rent when he took out a $500 payday loan. But when his hours at work got cut, he couldn’t pay back the loan. So, on the advice of his lender, he took out another loan from a different company to help cover the payments on his original loan. Before long, he owed almost $2,000. “It’s embarrassing to have to explain to them what you’re going through,” he said of his experience with payday lenders.[25]

Who takes out payday loans in Las Vegas? Borrowers are generally individuals without a college degree, those making less $40,000 a year, individuals who are separated or divorced, home renters and African Americans.[26] Veterans are also frequent users of payday loans. In a 2015 survey, 20 percent of Nevada veterans said they had taken out a payday loan or used a cash advance service.[27] Most borrowers, like Harold Carnes, use payday loans to cover ordinary bills and living expenses, rather than emergencies.[28]

Quick Fact Quick Fact

The average Nevada payday loan amount is $350[40]

Recent Las Vegas Payday Loans News

“These bills died in the Nevada Legislature, but they would have improved life in Las Vegas”
Las Vegas Review Journal, June 8, 2017
“There were several payday loan reform bills introduced in the 2017 session, most of which contained good ideas. State Treasurer Dan Schwartz’s approach in SB 17 sought to prohibit lenders from making more than one loan at a time to the same person, impose a cooling-off period between loans and establish a statewide database of loans to ensure compliance that would be paid for by the industry.”

“Nevada passes new payday lending reforms”
KTNV, May 25, 2017
“The Nevada legislature has passed new reforms that aim to protect consumer who use payday lenders for quick cash. The proposal was sponsored by Assemblyman Edgar Flores (D-Las Vegas), who says he’s seen people around the valley trapped in loans they can’t pay off and some lenders getting out of hand with dramatically increasing rates.”

“The Indy Explains: Lawmakers push for additional rules on high-interest payday loans”
Nevada Independent, March 12, 2017
“In Nevada, it is perfectly legal to get a loan with an interest rate of 521 percent. Though the number appears outrageously high to anyone used to normal banks and loans, that three-digit interest rate is actually the average amount charged on ‘payday loans’ — the high-interest, short term loans that are regulated but not capped under state law.”

“Payday loans reform advocates say Las Vegas borrowers often end up on ‘treadmill of debt’”
Las Vegas Review Journal, August 4, 2016
“‘There are more payday loans in Nevada than there are McDonald’s,’ said AJ Buhay, the field director for Progressive Leadership Alliance of Nevada (PLAN), 2330 Paseo Del Prado. ‘All you really need is a pay stub, a photo ID and a few references. With that, people can have hundreds of dollars in about 20 minutes.’ The process of payday loans is simple — a lender lets people borrow a small amount of money to be paid back with interest in one lump sum by the next pay period. Some lenders allow people to make installment payments. However, many activists advocating for payday lenders industry regulations see the darker side of the loans, saying they tend to be predatory.”

Title Loans in Las Vegas

Think of your car. Without it, could you get to work? Take yourself or a parent to medical appointments? Drop your children at school or daycare?

For many of us, cars are absolutely essential to our everyday lives. And that’s what makes title loans so risky—they put your car ownership at risk.

To receive a title loan, borrowers hand over the title to their vehicle in exchange for cash—typically around $951 in Nevada. A typical APR is around 300 percent. That means borrowers pay $25 for every $100 they receive. Many borrowers can’t repay the loan when it comes due, so they renew their loan multiple times, paying new fees each time. In the end, lots of borrowers end up losing their cars.[29]

Lenders are “trying to get as much money out of you as possible, for as long as possible, and they still take your car in the end,” explains Christine Miller, an attorney with the Legal Aid Center of Southern Nevada.[30]

It’s worth noting that about half of US states have decided title loans are so dangerous they’ve actually outlawed them.[31] Still, about one million US households take out a car title loan every year, according to the Federal Deposit Insurance Corporation.[32]

As of 2013, there were 197 car title lenders in Nevada. That means there’s one title lender for every 10,333 adults in the state.[33] And every year, these title lenders take $104,843,696 in fees out of Nevadans’ pockets.[34]

Quick Fact Quick Fact

Title lenders collect $104,843,696 in fees from Nevada borrowers every year[39]

Las Vegas Title Loan Borrower Story

Las Vegas resident and retiree Wayne Fischer gets less than $500 a month from Social Security. That check is his main source of income, so he has to stretch it to cover all his monthly expenses. Despite Fischer’s small income, a Las Vegas title lender gave him $2,500 to be paid back in 30 days. In exchange, Fischer handed over the title to his 2006 Ford Ranger. His lender seized the car when Fischer couldn’t pay back the loan. His financial troubles have only gotten worse since then. “I can’t get anywhere. I can’t get to jobs,” Fischer told the Las Vegas Review Journal.[35]

Quick Fact Quick Fact

The average Nevada car title loan amount is $951[41]

Title Loan Borrowers in Las Vegas

What do we know about the demographics of title loan borrowers such as Fischer? According to the Pew Charitable Trusts, many have annual incomes of less than $42,000 and use title loans to cover everyday bills. About half of title loan borrowers are renters, 63 percent are employed, and 46 percent are married. Two in three can’t afford a monthly payment of more than $250 per month. 65 percent are white, while 14 percent are African American and 12 percent are Latino.

Quick Fact Quick Fact

20 percent of Nevada veterans have taken out a payday loan or used a cash advance service.[42]

Recent Las Vegas Title Loan News

“The Indy Explains: Lawmakers push for additional rules on high-interest payday loans”
Nevada Independent, March 12, 2017
“In Nevada law, title loans are defined as having a higher than 35 percent interest on a loan that involves giving the title of a legally owned car as collateral for securing a loan, or adding a loan issuer as a lien holder on the vehicle as part of the loan. In Nevada, loans are required to not exceed the ‘fair market value’ of the vehicle and are limited to 30 days (up to six extensions, with conditions) and no interest rate cap. Customers are required to disclose their employment status, income and ability to repay the loan before it’s issued.”

“Borrow $2,500 today, lose an $8,000 car tomorrow”
Las Vegas Review-Journal, November 29, 2015
“Largely unregulated in Nevada and most other states, the $4.3 billion-a-year title loan industry drives thousands of consumers over the financial edge, even when they make their payments. In states with limits, lenders exploit legal loopholes to skirt consumer protections. The consequences are shared by all.”

“High-interest lenders need more, not less, supervision”
Las Vegas Sun, October 16, 2012
“Payday lenders and title loan stores seem to anchor every other shopping center [around the Las Vegas Valley], and not just in working-class neighborhoods. There are 421 branches of high-interest loan licensees in Nevada, most here in the Las Vegas Valley.”

Quick Fact Quick Fact

10.1 percent of Las Vegas-area households are fully unbanked, and 29.1 percent are underbanked.[43]

Las Vegas Payday Loan and Title Loan Borrower Resources

Legal assistance

If you are being harassed by a lender, seek advice from a trustworthy attorney. Nevada has several legal aid organizations that provide low- or no-cost (“pro bono”) legal assistance:

Legal Aid Center of Southern Nevada
725 E. Charleston Blvd.
Las Vegas, NV 89104
(702) 386-1070
lacsn.org

Nevada Legal Services
530 S. 6th Street
Las Vegas, NV 89101
(702) 386-0404
nlslaw.net

Report problems with a payday lender

Nevada Financial Institutions Division
Address: 3300 W. Sahara Ave., Suite 250, Las Vegas, Nevada 89102
(702) 486-4120
fid.nv.gov/

Consumer Financial Protection Bureau
(855) 411-2372
consumerfinance.gov

Emergency financial and housing assistance

Hopelink of Southern Nevada
178 Westminster Way
Henderson, NV 89015
(702) 566-0576
link2hope.org

References

  1. “Nevada passes new payday lending reforms,” KTNV.  Accessed November 14, 2017. http://www.ktnv.com/news/nevada-passes-new-payday-lending-reforms”>
  2. “These bills died in the Nevada Legislature, but they would have improved life in Las Vegas,” Las Vegas Review Journal. Accessed November 16, 2017. https://www.reviewjournal.com/steve-sebelius/these-bills-died-in-the-nevada-legislature-but-they-would-have-improved-life-in-las-vegas/
  3. “Map of US payday interest rates,” Center for Responsible Lending. Accessed November 20, 2017. http://responsiblelending.org/research-publication/map-us-payday-interest-rates
  4. “Loan store request approved despite ordinance,” Las Vegas Sun. Accessed November 14, 2017. https://lasvegassun.com/news/2006/dec/20/loan-store-request-approved-despite-ordinance/
  5. “Most of Clark County’s payday loan stores clustered in ZIP codes around Nellis AFB,” Las Vegas Review Journal. Accessed November 20, 2017. https://www.reviewjournal.com/local/local-las-vegas/downtown/most-of-clark-countys-payday-loan-stores-clustered-in-zip-codes-around-nellis-afb/
  6. “The Indy Explains: Lawmakers push for additional rules on high-interest payday loans,” Nevada Independent. Accessed November 14, 2017. https://thenevadaindependent.com/article/indy-explains-lawmakers-push-additional-rules-high-interest-payday-loans
  7. “Payday loan companies targeted,” Associated Press. Accessed November 14, 2017.  http://www.nevadaappeal.com/news/payday-loan-companies-targeted/
  8. “Payday Lending Abuses and Predatory Practices,” Center for Responsible Lending. Accessed November 14, 2017. http://www.responsiblelending.org/state-of-lending/reports/10-Payday-Loans.pdf
  9. “Connecting the Dots: Payday lenders command powerful presence at Legislature,” Nevada Independent. Accessed November 14, 2017. https://thenevadaindependent.com/article/connecting-dots-payday-lenders-command-powerful-presence-legislature
  10. “Map of US payday interest rates,” Center for Responsible Lending. Accessed November 20, 2017. http://responsiblelending.org/research-publication/map-us-payday-interest-rates
  11. “Payday loans reform advocates say Las Vegas borrowers often end up on ‘treadmill of debt,’” Las Vegas Review Journal. Accessed November 20, 2017. https://www.reviewjournal.com/local/local-las-vegas/downtown/payday-loans-reform-advocates-say-las-vegas-borrowers-often-end-up-on-treadmill-of-debt/
  12. “Nevada passes new payday lending reforms,” KTNV.  Accessed November 14, 2017. http://www.ktnv.com/news/nevada-passes-new-payday-lending-reforms
  13. “Las Vegas,” Encyclopedia Britannica. Accessed November 20, 2017. https://www.britannica.com/place/Las-Vegas-Nevada
  14. “Quick Facts: Las Vegas,” US Census Bureau. Accessed November 20, 2017. https://www.census.gov/quickfacts/fact/table/lasvegascitynevada/PST045216
  15. “Quick Facts: Las Vegas,” US Census Bureau. Accessed November 20, 2017. https://www.census.gov/quickfacts/fact/table/lasvegascitynevada/PST045216
  16. “Economy at a Glance,” Bureau of Labor Statistics. Accessed November 20, 2017. https://www.bls.gov/eag/eag.nv_lasvegas_msa.htm
  17. “Think Payday Lending isn’t out of control in the United States?” California State University Northridge. Accessed November 20, 2017. http://www.csun.edu/~sg4002/research/mcdonalds_by_state.htm
  18. “Most of Clark County’s payday loan stores clustered in ZIP codes around Nellis AFB,” Las Vegas Review Journal. Accessed November 20, 2017. https://www.reviewjournal.com/local/local-las-vegas/downtown/most-of-clark-countys-payday-loan-stores-clustered-in-zip-codes-around-nellis-afb/
  19. “Information about our overdraft services,” Chase Bank. Accessed November 20, 2017. https://www.chase.com/personal/checking/overdraft-services/standard-overdraft-practice
  20. “Payday Loans: How They Work, What They Cost,” NerdWallet. Accessed November 20, 2017. https://www.nerdwallet.com/blog/loans/payday-loan-alternatives-dodge-debt-trap/#payday1
  21. “CFPB Data Point: Payday Lending,” Consumer Financial Protection Bureau. Accessed November 20, 2017. http://files.consumerfinance.gov/f/201403_cfpb_report_payday-lending.pdf
  22. “Payday Lending Abuses and Predatory Practices,” Center for Responsible Lending. Accessed November 20, 2017. http://www.responsiblelending.org/state-of-lending/reports/10-Payday-Loans.pdf
  23. “How State Rate Limits Affect Payday Loan Prices, Pew Charitable Trusts,” Accessed November 20, 2017. http://www.pewtrusts.org/~/media/legacy/uploadedfiles/pcs/content-level_pages/fact_sheets/stateratelimitsfactsheetpdf.pdf
  24. “Nevada officials promise bill tightening rules on payday lending,” Las Vegas Review-Journal. Accessed November 20, 2017. https://www.reviewjournal.com/business/nevada-officials-promise-bill-tightening-rules-on-payday-lending/
  25. “Payday loans reform advocates say Las Vegas borrowers often end up on ‘treadmill of debt,’” Las Vegas Review-Journal. Accessed November 20, 2017. https://www.reviewjournal.com/local/local-las-vegas/downtown/payday-loans-reform-advocates-say-las-vegas-borrowers-often-end-up-on-treadmill-of-debt/
  26. “Payday lending abuses and predatory practices,” Center for Responsible Lending. Accessed November 14, 2017. http://www.responsiblelending.org/state-of-lending/reports/10-Payday-Loans.pdf
  27. “Executive Summary: Nevada Veterans Survey,” UNLV School of Environmental and Public Affairs. Accessed November 14, 2017. http://www.opportunityalliancenv.org/wp-content/uploads/2015/04/OA-Veterans-Survey-Final-Report-for-Release-January-2015.pdf
  28. “Who Borrows, Where They Borrow, and Why,” Pew Charitable Trusts. Accessed November 14, 2017. http://www.pewtrusts.org/~/media/legacy/uploadedfiles/pcs_assets/2012/pewpaydaylendingexecsummarypdf.pdf
  29. “Driven to Disaster: Car-Title Lending and Its Impact on Consumers,” Center for Responsible Lending. Accessed November 20, 2017. http://www.responsiblelending.org/other-consumer-loans/car-title-loans/research-analysis/CRL-Car-Title-Report-FINAL.pdf
  30. “Borrow $2,500 today, lose an $8,000 car tomorrow,” Las Vegas Review-Journal. Accessed November 20, 2017. https://www.reviewjournal.com/business/borrow-2500-today-lose-an-8000-car-tomorrow/
  31. “States That Allow Car Title Loans,” Investopedia. Accessed November 14, 2017. http://www.investopedia.com/articles/personal-finance/110714/states-allow-car-title-loans.asp
  32. “Borrow $2,500 today, lose an $8,000 car tomorrow,” Las Vegas Review-Journal. Accessed November 14, 2017. https://www.reviewjournal.com/business/borrow-2500-today-lose-an-8000-car-tomorrow/
  33. “Driven to Disaster: Car-Title Lending and Its Impact on Consumers,” Center for Responsible Lending. Accessed November 20, 2017. http://www.responsiblelending.org/other-consumer-loans/car-title-loans/research-analysis/CRL-Car-Title-Report-FINAL.pdf
  34. “Payday and Car Title Lenders Drain $8 Billion in Fees Every Year,” Accessed November 20, 2017. http://responsiblelending.org/sites/default/files/nodes/files/research-publication/crl_statebystate_fee_drain_may2016_0.pdf
  35. “Borrow $2,500 today, lose an $8,000 car tomorrow,” Las Vegas Review-Journal. Accessed November 20, 2017. https://www.reviewjournal.com/business/borrow-2500-today-lose-an-8000-car-tomorrow/
  36. “Most of Clark County’s payday loan stores clustered in ZIP codes around Nellis AFB,” Las Vegas Review Journal. Accessed November 20, 2017. https://www.reviewjournal.com/local/local-las-vegas/downtown/most-of-clark-countys-payday-loan-stores-clustered-in-zip-codes-around-nellis-afb/
  37. “Map of U.S. Payday Interest Rates,” Center for Responsible Lending. Accessed November 20, 2017. http://responsiblelending.org/research-publication/map-us-payday-interest-rates
  38. “Payday Lending Abuses and Predatory Practices,” Center for Responsible Lending. Accessed November 20, 2017. http://www.responsiblelending.org/state-of-lending/reports/10-Payday-Loans.pdf
  39. “Payday and Car Title Lenders Drain $8 Billion in Fees Every Year,” Accessed November 20, 2017. http://responsiblelending.org/sites/default/files/nodes/files/research-publication/crl_statebystate_fee_drain_may2016_0.pdf
  40. “Payday Lending Abuses and Predatory Practices,” Center for Responsible Lending. Accessed November 20, 2017. http://www.responsiblelending.org/state-of-lending/reports/10-Payday-Loans.pdf
  41. “Driven to Disaster: Car-Title Lending and Its Impact on Consumers,” Center for Responsible Lending. Accessed November 20, 2017. http://www.responsiblelending.org/other-consumer-loans/car-title-loans/research-analysis/CRL-Car-Title-Report-FINAL.pdf
  42. “Executive Summary: Nevada Veterans Survey,” UNLV School of Environmental and Public Affairs. Accessed November 20, 2017. http://www.opportunityalliancenv.org/wp-content/uploads/2015/04/OA-Veterans-Survey-Final-Report-for-Release-January-2015.pdf
  43. “Rates of unbanked, underbanked on the rise in Southern Nevada,” Las Vegas Review-Journal. Accessed November 20, 2107. https://www.reviewjournal.com/business/rates-of-unbanked-underbanked-on-the-rise-in-southern-nevada/”>