Thursday, March 27, 2014
The Consumer Financial Protection Bureau released a report on payday lending that reaffirmed previous research on the debt trap consumers often find themselves in when they take out payday loans. CFPB Director Richard Cordray said many borrowers end up "owing as much or more on their very last loan as the entire amount they had borrowed initially."
Building upon its 2013 report Payday Loans and Deposit Advance Products, the CFPB's new report is based on data collected from more than 12 million payday loans over a 12-month period. The CFPB found that:
"We are concerned that too many borrowers slide into the debt traps that payday loans can become," said Cordray. "As we work to bring needed reforms to the payday market, we want to ensure consumers have access to small-dollar loans that help them get ahead, not push them farther behind."
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