payday lending | KERA News

payday lending

From Texas Standard:

Texas leads the nation in payday lending and car title loan businesses with more than 3,000 storefronts across the state. Payday lenders are both a blessing and a curse: on one hand, they meet a need; on the other, they do so through sky-high interest rates.

That's why communities of faith are getting involved in the effort to better regulate them. But should faith leaders get involved in money matters?

 


Federal Rules Could Tame 'Wild West' Of Texas Payday Lending

Jun 20, 2016
Tamir Kalifa / The Texas Tribune

Leonard Abbott of San Marcos had heard of the dangers of payday loans — the small-dollar, high-interest credit that can quickly trap borrowers in a morass of debt. But when unexpected medical bills blew a hole in his monthly budget last year, he felt he had nowhere else to turn. He took out a $500 loan, expecting to pay it back in full in two weeks. When he couldn’t, he sought more loans, until about a third of his $1,700 monthly take-home pay was going toward paying interest and fees alone.

 

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When faced with a financial emergency, some turn to payday or car title lenders. There’s about 175 of them in Dallas offering quick cash at great cost. The city and an Austin-based lender to small businesses have announced an alternative.