According to the CRL, predatory lending practices cost American families
$4.2 billion every year. This non-profit nonprofit, nonpartisan research
and policy organization says the typical payday borrower pays back $793
for a $325 loan.

In a CRL report, "Financial Quicksand: Payday lending Sinks Borrowers in
Debt.," it found that predatory lending in a one-year period cost Texans
$259 million. Only three states had higher figures, California,
Louisiana and Missouri. According to the latest figures available from
the CRL, in a one-year period, predatory lending cost California
residents $365 million.

The CRL says consumers should be aware of the signs of a predatory
payday loan:

Triple digit interest rate
Short minimum loan term
Single balloon payment
Loan flipping (extensions, rollovers or back to back transactions)
No consideration of borrower's ability to repay
Deferred check mechanism
Mandatory arbitration clause
No restrictions on out-of-state banks violating local state laws

The CRL insists payday lenders are not the only option for consumers
facing debt problems. On its website its lists the many alternatives
available to consumers, including credit unions. "Many credit unions,"
it writes on its web site, "offer small, short-term loans to their
members. For example, North Carolina State Employees' CU offers members
a salary advance loan at 11.75 percent annual interest -- 30 times
cheaper than a typical payday loan. Some credit unions also offer free
financial counseling and a savings plan to help members get back on
their feet. Many other credit unions offer very low interest rate loans
(prime to 18 percent annual interest) with quick approval on an
emergency basis. Unlike payday loans, these loans give the borrowers a
real chance to repay with longer payback periods and installment
payments."

Other tips posted on its site include:

Payment Plan with Creditors
Advances from Employers
Consumer Credit Counseling
Emergency Assistance Programs
Military Loans

To view the four-minute video featuring an interview with a former
payday-loan store manager, please go to
http://www.responsiblelending.org/issues/payday/inside-the-payday-industry.html.