The CFPB has payday loans on its radar – and it turns out many Americans do too.
According to a survey by The Pew Charitable Trusts, only one in 10 Americans view payday lenders positively and a vast majority want to see more regulation over payday loans. Payday loans are popular for individuals who need a temporary loan but cannot use a traditional loan method due to poor credit, and for those who don't want to go through the underwriting process. However, despite being used by 12 million Americans in 2010 – the last year during which a significant payday loan usage study was completed – 84% of Americans say the fees are unfair.
The average loan, according to The Pew Charitable Trusts, is worth $375, and the fees paid for every two weeks of borrowing is $55 in-store and $95 if the loan is taken out online. The loans typically take 36% of the borrower's pretax paycheck and significantly hinder the borrower's ability to pay other bills without relying on a secondary payday loan.
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