Abusive Lending Practices Can Lead To Negative Long-Term Consequences For Borrowers, Communities
by Ashlee Kieler, Consumerist
Every year, more than 12 million Americans spend $17 billion on payday loans, despite the fact research has shown these costly lines of credit often leave borrowers worse off. Yet abusive lending practices are not relegated to borrowers in need of a couple hundred dollars to stay afloat until their next paycheck; there are mortgages, car loans, and other traditional lines of credit that can leave the borrower in a bind. Even if you never find yourself on the wrong end of a predatory loan, these products can still be a drain on your entire community.
This is according to a new report from the Center for Responsible Lending that explores the universal impact and cumulative costs of predatory lending practices on individuals, households and communities.
The Cumulative Costs of Predatory Practices [PDF] is the final chapter of CRL’s State of Lending series that looks at all types of credit products including mortgages, auto loans, credit cards, student loans, car-title loans, overdrafts, bank payday loans, payday loans, debt settlement, and debt collection to explain how unfair lending practices can jeopardize the economic stability of families and households.