A while later, the session recessed and Kraninger and a handful of her aides repaired to the women’s room. A ProPublica reporter was there, too. The group lingered, seeming to relish what they considered a triumph in the hearing room. I stole that calculator, Kathy, one of the aides said. It’s ours! It’s ours now! Kraninger and her team laughed.
That’s what happened to Maria Dichter. Now 73, retired from the insurance industry and living in Palm Beach County, Florida, Dichter first took out a payday loan in 2011. Both she and her husband had gotten knee replacements, and he was about to get a pacemaker. She needed $100 to cover the co-pay on their medication. As is required, Dichter brought identification and her Social Security number and gave the lender a postdated check to pay what she owed. (All of this is standard for payday loans; borrowers either postdate a check or grant the lender access to their bank account.) What nobody asked her to do was show that she had the means to repay the loan. Dichter got the $100 the same day.
The relief was only temporary. Dichter soon needed to pay for more doctors’ appointments and prescriptions. She went back and got a new loan for $300 to cover the first one and provide some more cash. A few months later, she paid that off with a new $500 loan.
Dichter collects a Social Security check each month, but she has never been able to catch up. For almost eight years now, she has renewed her $500 loan every month. Each time she is charged $54 in fees and interest. That means Dichter has paid about $5,000 in interest and fees since 2011 on what is effectively one loan for $500.
Today, Dichter said, she is trapped. She and her husband subsist on eggs and Special K cereal. Now I’m worried, Dichter said, because if that pacemaker goes and he can’t replace the battery, he’s dead.
Payday loans are marketed as a quick fix for people who are facing a financial emergency like a broken-down car or an unexpected medical bill. But studies show that most borrowers use the loans to cover everyday expenses. We have a lot of clients who come regularly, said e), a clerk at one of Advance America’s 1,900 stores, this one in a suburban strip mall not far from the Doral hotel. We have customers that come two times every month. We’ve had them consecutively for three years.
These types of lenders rely on repeat borrowers. The average store only has 500 unique customers a year, but they have the overhead of a conventional retail store, said Alex Horowitz, a senior research officer at Pew Charitable Trusts, who has spent years studying payday lending. If people just used one or two loans, then lenders wouldn’t be profitable.
In state after state that has tried to ban payday and similar loans, the industry has found ways to continue to peddle them.
It was years of stories like Dichter’s that led the CFPB to draft a rule that would require that lenders ascertain the borrower’s ability to repay their loans. We determined that these loans were very problematic for a large number of consumers who got stuck in what was supposed to be a short-term loan, said Cordray, the first director of the CFPB, in an interview with ProPublica and WNYC. Finishing the ability-to-pay rule was one of the reasons he stayed on even after the Trump administration began. payday loans Flagstaff AZ online (Cordray left in e an unsuccessful run for governor of Ohio.)