RAISE Florida Network is releasing research findings and an advocacy toolkit to provide important tools for members, stakeholders and partners. Payday lending for more than 2 million lower income families in Florida becomes a debt trap.
- Payday loans are small, unsecured and short-term loans. They are high interest rate loans that are usually repaid on the borrower’s next payday. The average value of a typical two-week payday loan is around $387 in Florida.
- The annual percentage rate for a two-week payday loan of $387 with a $41.55 fee is about 290 percent.
- Payday lending forces customers to become repeat borrowers because of high fees charged with each loan. In fact, 39% of repeat borrowers take out another loan one day after paying off their existing loan and most, 86%, take an another loan within two weeks of their previous loan.
- Most of the payday customers are low- to moderate-income households with an income range of $15,000-$50,000.
- In Florida, an average borrower receives a payday loan about nine times a year (Veritec, 2012).
In Florida alone, payday lending is a $2.85 billion industry with approximately 2.4 million customers (Veritec Solutions 2012). However, unlike most business, Florida’s payday lending industry often traps borrowers in a cycle of debt and strips more than $244 million of Florida’s wealth. With more than 1,600 stores the payday lending industry makes 7.2 million loans in 2012 alone.
Over the next few weeks the RAISE Florida Network is holding regional meetings in Jacksonville, Pensacola, Miami, and Orlando to educate community leaders and gather stories on the impact of payday loans on working families. For more information go to: RAISE Florida Network
sunshineadvocacy.com 