Earning It isn’t enough to lift families out of poverty—they have to Keep It and Grow It too. Individual Development Accounts (IDAs) are one of the most successful and tested ways to help families Keep It and Grow It. But there are special challenges and opportunities when you start and run an IDA program in a rural place. The basics […]
Keep It Goal 3
Families get loans they need without using predatory lenders.
Common Sense
- High-cost lenders target low-income families with high-interest loan products.
- Considered an urban phenomenon, overpriced check-cashing outlets and payday lenders are growing most rapidly in rural areas – and are becoming easily available over the phone and internet.
- Quite often, a predatory loan is the only kind that low-income families can get.
Fast Facts
- Borrowers lose about $25 billion annually to predatory mortgages, payday loans, and other lending abuses like overdraft loans, excessive credit card debt, and tax refund loans. (Center for Responsible Lending, Quantifying the Economic Cost of Predatory Payday Lending, 2003)
- The typical “payday loan” charges about 400 percent annual interest. (Center for Responsible Lending, Financial Quicksand, 2006)
- 90% of the payday lending business is generated by borrowers with five or more loans per year, and over 60% of business is generated by borrowers with 12 or more loans per year. (Center for Responsible Lending, Fast Facts)
- 8,000 rent-to-own stores serve 3 million customers, who pay two to three times more for furniture or electronics than if the paid cash. (AECF, The High Cost of Being Poor,2004) (Federal Trade Commission, Rent-to-Own Transactions, 2001)
Check out related Action Ideas and Alerts below! Or view other Keep It goals here.
Rural Family Economic Success Action Network 