James Dillon v. BMO Harris Bank, N.A.

Filing

OPINION ATTACHMENT. [16-1362]

What is a payday loan? > Consumer Financial Protection Bureau
Appeal: 16-1362
Doc: 60
Filed: 05/10/2017
Pg: 1 of 3

Page 1 of 3

The Consumer Financial Protection Bureau is a government agency built to protect
consumers. Our free resources help you have the information you need to make
informed financial decisions.

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https://www.consumerfinance.gov/askcfpb/1567/what-payday-loan.html

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What is a payday loan? > Consumer Financial Protection Bureau
Appeal: 16-1362
Doc: 60
Filed: 05/10/2017
Pg: 2 of 3

Page 2 of 3

What is a payday loan?
Answer: A payday loan is a short-term loan, generally for
$500 or less, that is typically due on your next payday. 
Payday loans generally have three features:
◾ The loans are for small amounts.
◾ The loans typically come due your next payday.
◾ You must give lenders access to your checking account or write a check for the
full balance in advance that the lender has an option of depositing when the loan
comes due.
Other loan features can vary. For example, payday loans are often structured to be
paid off in one lump-sum payment, but interest-only payments – "renewals" or
“rollovers” – are not unusual. In some cases, payday loans may be structured so that
they are repayable in installments over a longer period of time.

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Some ways that lenders might give you the loan funds include: providing cash or a
we or electronically depositing the
e
check, loading the funds onto a prepaid debit card,
, vi
money into your checking account. 2
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-13 may range from $10 to $30 for every $100
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The cost of the loan (finance charge)
. 1 payday loan with a $15 per $100 fee equates to an
borrowed. A typical two-week
No
annual percentage rate (APR) of almost 400%. By comparison, APRs on credit cards
can range from about 12 percent to 30 percent.

State laws and other factors can influence how much you can borrow and the fees
you are charged. Some states do not have payday lending storefronts because
these loans are not permitted by the state’s law, or because lenders may choose not
to do business in a state rather than abide by the states’ regulations.
There are special protections through the Military Lending Act for active duty
servicemembers and their dependents who use certain payday loans and other
small dollar credit products.

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https://www.consumerfinance.gov/askcfpb/1567/what-payday-loan.html

4/3/2017

What is a payday loan? > Consumer Financial Protection Bureau
Appeal: 16-1362
Doc: 60
Filed: 05/10/2017
Pg: 3 of 3

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