Pew's small-dollar loans project focuses on conducting research that demonstrates the needs, perceptions, and motivations of consumers, as well as the impacts of market practices and potential regulations. Based on this research, the project puts forth policy recommendations designed to protect consumers from harmful practices and promote safe and transparent small-dollar credit.
Research & AnalysisView All
Proposed regulations from the Consumer Financial Protection Bureau (CFPB) would protect consumers from conventional, lump-sum payday loans, which Pew’s research has shown usually have unaffordable payments that trigger reborrowing. The pending rule strongly encourages payday and auto title lenders to give borrowers more time to repay loans in smaller installments, rather than large lump-sum... Read More
In June, the Consumer Financial Protection Bureau (CFPB) released a proposed rule to regulate payday, auto title, and some high-cost installment loans. The proposal applies to “covered loans” from any lender, including payday, auto title, online, and nonbank installment lenders as well as banks and credit unions, but not to overdraft services, pawn loans, business loans, and other... Read More
All of the largest payday lenders now offer installment loans, which are repayable over time and secured by access to the borrower’s checking account, in addition to conventional payday loans that are due in a single lump sum. This shift toward installment lending has been geographically widespread, with payday or auto title lenders issuing such loans or lines of credit in 26 of the 39... Read More