A Broken Economy?

When 33% of Americans need payday advances to make ends meet, we’ve got problems

Photo by Jp Valery on Unsplash

I’ve written a bit about how fintech lenders by way of apps are replacing payday loans in the predatory lending space.

Some Dude Who Hasn’t Shaved in Two Days Wants to Give You a Loan on Your Phone

A new survey by DebtHammer suggests that as many as 1/3 of Americans are now using payday loan apps to address cashflow challenges.

DebtHammer’s latest survey found that more than 33% of Americans have now signed up for at least one of these apps. Of that group, 95% have used them for at least one short-term loan, which many couldn’t afford to repay.

Some of these apps are luring people into seemingly easy to access loans with triple digit fees. DebtHammer notes:

The CFPB alleges that New York City-based MoneyLion violated the Military Lending Act by charging more than the legally allowable 36% rate cap on loans to servicemembers and their dependents, through a combination of stated interest rates and monthly membership fees. The CFPB also alleges MoneyLion required customers to join a membership…