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Reinvestment Alert 14: Unregulated Payday Lending Pulls Vulnerable Consumers Into Spiraling Debt

March 8, 2000

In recent years, there have been growing concerns about the ability of lower-income people toaccumulate financial assets. Because of the strong economy, new welfare regulations, andcontinuing immigration, an increasing number of lower-income people are entering theworkforce and receiving paychecks regularly. However, lower-income people remain at adisadvantage for building wealth. High-cost credit is one obstacle to asset development forlower-income people, and the payday loan is one example of high-cost credit. This report provides a new analysis of the payday lending industry and its customers. Usingdata obtained from the Illinois Department of Financial Institutions (DFI) and various othersources, it finds major faults in the key defenses that the industry has used against strongerconsumer regulation.

An Analysis of Residential Lending Patterns in Benton Harbor and St. Joseph, Michigan

May 11, 1999

The goal of this report is to examine one segment of community economic activity -- home lending -- in the Benton Harbor-St. Joseph area. We aim to identify potential disparities and develop ways to improve access to affordable mortgage credit for low- and moderate-income community residents, particularly those in Benton Harbor. The availability of fairly priced housing credit is critical to the stability of a community. Without it, properties deteriorate and may eventually be abandoned, and modest-income families see their chief method of building wealth undermined. An analysis of mortgage lending in a community can indicate practices that contribute to disinvestment in an area. Examining lending patterns serves to identify credit needs and indicate opportunities for improved lending practices.