Small-Dollar Loans

Since 2011, Pew’s small-dollar loans project has conducted extensive research on payday, auto title, and similar loans and found that the market is plagued by unaffordable payments, deceptive business practices, and excessive prices.

The Consumer Financial Protection Bureau—the federal agency charged with regulating these loans—has proposed a new rule. However, without changes, the regulation would allow payday loans with 400 percent interest rates to flourish while locking out lower-cost loans from banks that could save millions of borrowers billions of dollars.

Pew provides research, recommendations, and technical assistance to help state and federal lawmakers craft policies for a fair, safe, and affordable small-dollar loan marketplace.

Our Work

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  • A Year After CFPB Proposed a Rule for Small Loans, Borrowers Still Await Reform

    June 2 marked the one-year anniversary of the release of the Consumer Financial Protection Bureau’s official Notice of Proposed Rulemaking for Payday, Auto Title, and Certain High-Cost Installment Loans. The CFPB received more than 1 million comments on the proposal. Pew’s research indicates that federal regulation is important, but the proposal misses the mark by allowing 400 percent... Read More

  • How OCC Can Help Banks Disrupt the Payday Loan Industry

    President Trump has recently named an acting comptroller of the currency, the head of the federal agency regulating large banks. As the American Banker noted, some big questions await the agency. While much is at stake for our country’s banks, a lot is on the line for individuals and their families as well. One important opportunity that the next Office of the Comptroller of the Currency... Read More

  • Payday Loan Customers Want More Protections, Access to Lower-Cost Credit From Banks

    Payday loans typically carry annual percentage rates of 300 to 500 percent and are due on the borrower’s next payday (roughly two weeks later) in lump-sum payments that consume about a third of the average customer’s paycheck, making the loans difficult to repay without borrowing again. They are characterized by unaffordable payments, unreasonable loan terms, and unnecessarily high... Read More

Payday Loans — And How to Fix Them

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Media Contact

Esther Berg

Officer, Communications

202.552.2283