Truth in Payday Lending: James’ Story

PayDay Lending-02

This week we begin a brand new series to highlight the struggles many Latinos have endured because of payday lending services that have trapped them in a vicious and costly cycle.

 The Consumer Financial Protection Bureau (CFPB) is weighing the adoption of a regulation that could seriously alter how the industry conducts its business going forward. NCLR vigorously supports the CFPB’s efforts to make the financial marketplace fair for consumers.

Keep up with the latest from UnidosUS

Sign up for the weekly UnidosUS Action Network newsletter delivered every Thursday.

In anticipation of the announcement, we’re featuring the stories of some of the many Latino borrowers who, desperate to meet financial obligations, got trapped in a seemingly endless borrowing cycle. The names of the people we profile have been changed.

Photo: Taber Andrew Bain

Our first story comes to us from James in Orlando, Florida.

Like so many others who take out payday loans, James needed some extra cash to get ahead on some bills. Visiting an ACE Cash Express location, James decided to take out a $500 loan that was supposed to be paid back in one month.

That never happened and James ended up having to roll the loan over two more times just to be able to pay back his initial loan, racking up additional financing fees.

For James’ part, he understood the jeopardy that taking out such loans can put borrowers in, but he was caught between this risk and the reality of being on short on funds he needed to meet his monthly financial obligations.

“It [a payday loan] helps, but it also puts you behind due to the situation where it becomes a continued pay and borrow again,” said James.

The unfortunate reality for James is that he indicated to us that if he needed funds again, he would indeed take out another payday loan.

“I have to in order to keep things running to date,” said James.

Photo:, Creative Commons

Despite being aware of other options, for many consumers, the payday lending system is simply the easiest one in which to access quick cash. This is by design. Since these lenders operate with seemingly little regulation it is not uncommon to hear stories about borrowers being forced to choose between paying their loan back and paying for basic living expenses. In James’ case, he had to deal with that and also with falling behind on other bills because of his debt payments. And like many other payday borrowers, James still has an outstanding loan to pay back.

As you’ll see over the next few weeks, James’ story is not uncommon. If regulations that rein in payday lenders are not put in place, we can only expect to hear more stories like James’. That’s why we support the proposed CFPB rule to reform payday lending.

Check this column every week for more stories of Latino borrowers and visit to find out how you can help fight back against shady lending practices.

You might also be interested in:

By Marisabel Torres, Senior Policy Analyst, Economic Policy Project, UnidosUS We’re happy to be sharing some good news this week. UnidosUS is joining our advocacy partners in celebrating the Consumer […]