The CFPB Finds Payday and Deposit Advance Loans Can Trap Consumers with debt

Sustained Usage Of Loans Raises Consumer Protection Concerns

WASHINGTON, D.C. —Today, the buyer Financial Protection Bureau (CFPB) issued a study on deposit and payday advance loans discovering that for most customers these items result in a period of indebtedness. Free financing standards, high expenses, and dangerous loan structures may subscribe to the suffered use of those products that can trap borrowers with debt.

“This comprehensive research implies that payday and deposit advance loans place many consumers susceptible to switching what’s allowed to be a short-term, crisis loan into a long-lasting, costly debt obligations,” said CFPB Director Richard Cordray. (more…)