The Pew Charitable Trusts - State and Consumer Initiatives about Consumer Financial Security

Payday Loans Do Not Eliminate Checking Account Overdrafts

Payday lenders often advertise their loans as a way to avoid expensive checking account overdrafts. Research shows most borrowers end up paying fees for both.

Payday Loans Explained

Twelve million Americans take out payday loans every year, but there are still misconceptions about how they are actually used. Follow the story of Jennifer, a typical payday loan customer, who takes out a cash advance on her paycheck to make ends meet, but ends up paying more than $500 in fees.

Akron Beacon Journal: Convenient Trap

The Pew Charitable Trusts issued a report on payday-loan borrowers in February that said: “The choice to use payday loans is largely driven by unrealistic expectations and by desperation. Borrowers perceive the loans to be a reasonable short-term choice but express surprise and frustration at how long it takes to pay them back.”

Philadelphia Inquirer: CFPB: Payday Loans Leading to 'Revolving Door of Debt'

Short-term "payday" loans, and similar "deposit advance" loans offered by major banks, are trapping many consumers in a "revolving door of debt," according to a study due by the Consumer Financial Protection Bureau. The CFPB's study echoes findings in a February report by the Pew Charitable Trusts' Safe Small Dollar Loans Research Project.

Los Angeles Times: Bill Would Limit Number of Payday Loans to Any One Borrower

A bill before the California Legislature would restrict the number of payday loans to any one borrower — an attempt to break the "debt cycle" that ensnares some of the state's poorest residents.

Sacramento Bee: Editorial: An Incremental Step to Stem Payday Loans

Sacramento Bee edititorial: California's $3.3 billion payday lending industry preys on the poor and the financially unsophisticated. Attempts to rein it in have failed. California remains among the most permissive states when it comes to payday lending.

Infographic: Payday Loans and Tax Time

How do payday loan borrowers use their tax refund? Pew has shown that payday loans are used for long term expenses instead of emergencies, and that many payday borrowers end up paying off their balances with a cash windfall.

Infographic: Risky Refunds

What are the risks when consumers receive their tax refund on a prepaid card? The use of general purpose reloadable prepaid cards has grown 600 percent since 2010, and Americans are expected to load over $200 billion on them this year, according to the Mercator Advisory Group.

USA Today: Payday Loans Can Get Out of Control

The real question is, can [borrowers] actually afford to repay the payday loans? Come up with $300 or $500 in just two weeks? Or even in a month?

Marketplace: Payday Lenders Need to Be More Transparent

Every year, 12 million Americans take out high-interest, short-term payday loans. The industry likes to claim it's offering a needed service and helping people who can't get credit anywhere else.

Imperfect Protection

General purpose reloadable prepaid cards have rapidly gained popularity. They allow consumers to direct deposit their paychecks and pay their bills online, just like a checking account. But unlike checking accounts that carry up to $250,000 in mandatory deposit insurance per customer, prepaid cards are not required to carry any at all.

How Borrowers Choose and Repay Payday Loans

This report—the second in Pew’s Payday Lending in America series—answers questions about why borrowers choose payday loans, how they ultimately repay the loans, and how they feel about their experiences.

Payday Lending in America

This collection presents original research findings from the Pew Safe Small Dollar Loans Research Project on the existing landscape for payday lending around the country, state by state data on loan regulation, and other information critical to creating a safe and transparent marketplace for those who borrow small sums of money.

How Payday Loans Work

Each year, millions of people struggle to pay their bills. A consumer usually has several options to consider.

Payday Loan Affordability Fast Facts

Learn more about payday loans.

More Than Half of Top 12 U.S. Banks Now Use Pew’s Model Checking Disclosures

SunTrust voluntarily adopted The Pew Charitable Trusts’ disclosure summary for checking accounts today, becoming the seventh of the 12 largest banks in the country now using the simple disclosure box. Currently, this consumer-friendly information is available to over 40 percent of the US market, by deposit volume.

Are You Using a Prepaid Card to Buy Holiday Gifts?

Do you know what sort of fees you will pay or what times of consumer protections apply to you?

Paying for the Holidays

As the holiday shopping season takes off, consumers are turning to a variety of financial management tools. View our slideshow and learn more about Pew’s research on hidden bank fees, the growing use of prepaid debit cards, and the actual duration of payday loans that are marketed as two-week products.

Holiday Overdraft Fees Add Up

If you bought one of the following gifts, you could pay this much after an accidental overdraft.

Payday Loans Really Add Up

If you took out a loan for the following season expenses, you would pay far more and be indebted far longer than advertised.

Banking on Arbitration

The report, Banking on Arbitration: Big Banks, Consumers, and Checking Account Dispute Resolution, reviews the 100 largest financial institutions’ dispute resolution clauses as well as consumer attitudes about these practices.

Banking on Arbitration

Big banks, consumers, and checking account dispute resolution.

Arbitration Bound

How does dispute resolution work, what is arbitration, and what are a consumer's options at every step along the way? Find out the with the Pew Safe Checking Project's interactive.

After Sandy, Some Homeowners Spared from Costly Hurricane Deductibles

Governor Tom Corbett added Pennsylvania to the growing list of states — including Connecticut, Maryland, New Jersey and New York — where governors and insurance regulators have told insurers to spare homeowners from the costly deductibles after the superstorm whirled across the East Coast, causing heavy wind and flood damage to property and leaving millions without power.

Editorial: Pa. Lawmakers Should Lose Interest in Payday Loans

LOVE AND MONEY make people crazy. Love of money makes them even crazier, especially if they are lawmakers. That must be the explanation for why our own state lawmakers are back at the table talking about allowing payday lenders to

Still Risky: Bank Fees and Disclosures in the States

Where consumers live has a significant impact on how easily they can access information on terms, conditions and fees, as well as how much they will pay to maintain an account, overdraft, or accrue other fees.

Still Risky

Banks are continuing key banking practices that put consumers at financial risk and potentially expose them to high and unexpected costs for little benefit.

Quiz: Find the Fee

Do you read your bank's disclosures when opening an account? Where can consumers find important provisions about checking accounts? Take this interactive quiz to learn the answers.

Still Risky: Checking Accounts in Alabama

Checking accounts, the most widely used financial product in America, contain hidden risks that can harm consumers. Four of the 12 largest banks nationwide offer checking accounts in Alabama and hold 42 percent of all deposits in the state. Here’s what consumers in Alabama may be paying.

Still Risky: Checking Accounts in Alaska

Checking accounts, the most widely used financial product in America, contain hidden risks that can harm consumers. One of the 12 largest banks nationwide offers checking accounts in Alaska and holds 51 percent of all deposits in the state. Here’s what consumers in Alaska may be paying.

More Evidence That We’re Getting Hammered With Bank Fees

It's hard to tell which is piling up faster — the fees bank customers have to pay these days or the research showing just how pervasive these fees are.

Policy Recommendations: Improving Checking Account Consumer Protections

Pew has developed four key recommendations that can inform the efforts of the Consumer Financial Protection Bureau to improve bank transparency and practices, allowing consumers to comparison shop for the product that best meets their needs.

Pa. Senate panel Hears Testimony About Proposed Payday Lending Law

A controversial bill that would create a friendlier environment for payday lenders to take up residence in Pennsylvania is vying for Senate action this fall.

Long on Words, Short on Protections

Pew’s research showed that the median length of bank disclosures for key checking account policies and fee information was 69 pages.

Prepaid vs. Checking

What kind of consumer are you? How would switching from a checking account to a prepaid card affect the fees you pay when you manage your money? Find out with our new interactive quiz.

Loaded With Uncertainty

General purpose reloadable prepaid cards are rapidly growing in popularity. This study reveals that the prepaid card is a risky, largely unregulated alternative to the traditional checking account, but may work for some consumers who frequently incur high bank overdraft fees.

Banks simplifying checking account disclosures

Bowing to pressure from consumers and Congress, major banks are simplifying the information they provide to customers about their most basic product — the checking account. Bank of America Corp. said Wednesday that it was adopting plain language disclosures that

LA Times: BofA joins Chase, Citibank in Simplifying Checking Disclosures

Pressured by consumer advocates and Congress, most of the nation's big banks are now providing consumers a one page form listing basic terms and conditions for checking accounts, with Bank of America Corp. the latest to join the trend.

BofA Launches New Fee Disclosure Statements, Joining Other Banks

Bank of America Corp on Wednesday said it will provide customers with new, easy to read statements with information about fees for consumer and business checking accounts, following similar steps by other banks. The two page "checking clarity statements" will

Safe Checking: Policy Recommendations

Checking accounts are critical to the financial well-being of American families, but many bear hidden risks. Susan Weinstock, director of the Safe Checking in the Electronic Age project, offers four policy recommendations to make accounts more transparent and fair for consumers.

Senior Checking Accounts: Are They Worth It?

Banks offer special accounts for specific populations. Consumers should evaluate their options carefully before choosing their account type. As Americans open checking accounts across the country, many are often offered special products that banks market exclusively to seniors.

Student Checking Accounts: Are They Worth It?

Online Pew Center Study Includes Interactive Data on Payday Loans

California is among states with the least regulation of payday lending, allowing loans that if renewed repeatedly would sock borrowers with 391% annual interest rates or higher, according to a new study that classifies states as permissive, restrictive or in

Ohioans Big Users of Payday Lending

The Columbus Dispatch: About 1 in 10 Ohioans has used payday loans in the past five years, among the higher rates in the nation.

Nine States Where Lenders Take Your Paycheck

Payday loans — small, short term loans secured against a customer’s next paycheck — are highly controversial. A new study from Pew Charitable Trusts explains that opponents believe the practice “preys” on people who, because of the high interest rates

Payday Profits

The Office of the Comptroller of the Currency, which failed to control the reckless mortgage lending that helped cause the financial crisis, is widely regarded as a pushover among federal regulators. But the agency showed some welcome muscle and concern

Why to Steer Clear of Payday Loans

Payday loans are meant as a stopgap for the fiscally pinched. But in many cases, these short term loans create a costly cycle of escalating debt. A payday loan is like a cash advance on your paycheck. Marketed as a

Regulatory Comment: Proposed Rulemaking on General Purpose Reloadable Prepaid Cards

The Pew Charitable Trusts’ Financial Security Portfolio is pleased to provide comments in response to the Consumer Financial Protection Bureau’s Advanced Notice of Proposed Rulemaking on General Purpose Reloadable Prepaid Cards.

Payday Loan Borrowing By State

State payday loan usage ranges from 1 to 13 percent.

Quiz: Payday Lending in America

Each year, millions of Americans borrow payday loans from storefront and online lenders. Do you know who borrows, where they borrow, and why? Take our interactive quiz to learn more!