$50 Billion - What U.S. borrowers are taking out in payday (and other) short-term loans annually as of 2015.

$392 - The mean average dollar amount of a short-term loan, with a $350 median average.

391% - The average APR of a payday loan. Note: these loans are not offered over the course of a year. That comes to about $15 in interest/fees on every $100 borrowed for a two-week term, which is roughly the term of the loan.

75% - The number of American "middle class" consumers living paycheck to paycheck. A recent report by the Fed indicates that almost half of all Americans could not come up with $400 to pay an emergency bill in a week or less.

33% - The proportion of borrowers who use payday loans fewer than six times per year, 19% use payday loans 7-10 times per year, 34% use the service 11-19 times per year and 14% use payday loans 20 or more times a year.   Read more at PYMNTS.COM

Which brings us to payday lending and its proposed regulation - a subject that has turned out to be the 'Berserk Button' for a shocking number of consumer right advocates, congressmen, regulators, Senators, preachers, industry representatives business people and consumers.

So far, 2016 - a year that is only 16 weeks old - has seen such a staggering amount of drama that it's hard to recap without sounding like we're exaggerating. There's been name calling, insinuations of Biblical proportions of evil, double-crosses, triple-crosses, think-pieces, counter-think pieces and a pile of sturm and drang - unfolding in almost reliable weekly installment - as the CFPB is prepping to drop its big spring release: New Regulations For The PayDay Lending Industry.

And that is where things get complicated, and buttons are getting pushed. Payday lending, lending in specific - and short-term lending in general - is a much discussed topic that is in many ways not well understood. Who borrows, who lends and what the alternatives to the system in place now really are remain questions that are more often argued about than explained, which has led to some strange ideas on the topic.

PYMNTS want to help and cut through some of that clutter in the weeks before the new regulations drop, with data upfronts on the areas that are most frequently and easily misunderstood.

As PYMNTS has pointed before, the typical narrative about the sort of borrower who taps into a short-term loan is consistently off the mark. The headlines and narratives on the topic, however, tend to focus on low-income borrowers that exist unbanked on the edges of the financial mainstream.

The first is that extremely low-income unbanked consumers don't take out payday loans for the simple reason they mostly can't - one needs an account to deposit funds into and a paycheck to use as collateral of sorts. Unbanked and unemployed is also largely ineligible for a short-term loan.

Payday loans are for working class and middle income consumers, a reality that it seems that PYMNTS is finally not alone in pointing out.   Read the entire Primer at PYMNTS.COM

So often the conversation is focused on the city government and their budget. But the budgets of municipalities and counties is often reflective of the budgets of the citizens. One doesn't need to look far to know that thousands upon thousands of Detroiters have lost their homes in foreclosures, as well as many water shutoffs among other issues.

But a new report out shows that a small nest egg of as little as $250 can be the biggest of differences between paying that bill and not; or having to take out an expensive payday loan or just needing to be frugal to get by that tight month - or having to turn to the government for help.

The report draws the line between the financial health of cities and that of their citizens.

From the Urban Institute:

A few hundred dollars in savings "could help you pay a utility bill. That could keep you from taking out an auto title loan or a payday loan, which can lead you potentially into a spiral of debt," said Signe-Mary McKernan, senior fellow at the Urban Institute. "That doesn't mean that more savings isn't better...because we are finding that higher savings are associated with even lower hardship levels. So having more than $750 is going to get you even further. But don't let that wanting-to-get-further keep you from getting started." Read the report at DETROIT DAILY

CFPB: Why Regulators' War On Fees Will Kill Consumers

"Free" is so alluring that songwriters have created a boatload of songs about the concept.

Prince, who sadly passed away last week, has a song called "Free." "Be glad that U r free," the lyrics go, and I hope he is.

Then there's Pink, who also has a song called "Free." "I just wanna be free," she sings. I guess you can't copyright "free."

And who can forget the '70s ballad "Free Bird" by Lynyrd Skynyrd (I'm a bit partial to those guys since, like PYMNTS, they obviously have a thing against vowels) "Cause I'm as free as a bird now and this bird you cannot change."

Janis Joplin probably sang it best, though with, "Nothin', don't mean nothin' hon' if it ain't free."

"Free" has become the siren song of Silicon Valley now, too. Read the article at PYMNTS.COM

The CFPB has issued a new report entitled "Online Payday Loan Payments," summarizing data on returns of ACH payments made by bank customers to repay certain online payday loans. The latest report is the third report issued by the CFPB in connection with its payday loan rulemaking. (The previous reports were issued in April 2013 and March 2014.) In prepared remarks on the report, CFPB Director Cordray promises to "consider this data further as we continue to prepare new regulations to address issues with small-dollar lending." The Bureau indicates that it still expects to issue its long-awaited proposed rule later this spring.

The Bureau's press release cites three principal findings of the CFPB study.

According to the CFPB:

Half of online borrowers are charged an average of $185 in bank penalties.

One third of online borrowers hit with a bank penalty wind up losing their account.

Repeated debit attempts typically fail to collect money from the consumer.

When you are deep in debt, trying to scratch up cash for the rent and the car note, it is a bad time to say the payday loan companies are dangerous to your credit rating. But a bill pending in the Michigan Senate is about to make matters worse for people caught in economic cross-hairs.

"Relaxing the provisions on payday loan companies is just plain wrong," says consumer advocacy attorney Dani K. Liblang, of The Liblang Law Firm, PC in Birmingham. She recommends voters write their elected officials to thwart passage of SB 842 and SB 843, now in Banking and Financial Institutions committee.

Michigan has fine laws in place to keep consumers from tumbling deeper in debt beyond the 400 percent annualized interest currently charged by most payday lenders. Much of the protections in place would be nullified under the new provisions.

Provisions to relax loan amounts and increase the frequency of loans at payday lenders are trending around the country so consumers must be vigilant. The burden falls heaviest on the poor and financially overwhelmed. If tied to a car title loan, an individual mired in debt could lose his credit rating and his vehicle, making it harder to resurface. Read the story at DIGITAL JOURNAL

NAFCU President and CEO Dan Berger yesterday urged CFPB Director Richard Cordray to use the bureau's exemption authority provided in the Dodd-Frank Act to exempt credit unions from the upcoming payday lending rulemaking.

Berger reiterated that Section 1022 of the Dodd-Frank Act gives CFPB broad authority to grant exemptions on a rule-by-rule basis. He also noted that Cordray had called credit union payday alternative loans (PALs) a "good product" during his testimony before the Senate Banking Committee last week.

"NAFCU and our member credit unions support the CFPB's goal of protecting consumers from the dire financial consequences that often result from becoming entangled with predatory payday lending," Berger wrote. "To ensure the continued existence of credit unions as a viable alternative to predatory payday lenders, NAFCU recommends the Bureau apply its Section 1022 exemption authority to credit unions conducting short-term, small-amount loans in accordance with current state or federal laws, such as the PAL loan program." Read more at NAFCU

 
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