Predatory Lenders Offer African American Cash Loans

African American cash loans are typically offered by predatory lenders that charge unreasonable rates and have unfair terms. Studies have shown that these disreputable lenders often target Black and Latino communities.

Cash loans, also known as payday loans, provide workers with an advance on their next paychecks. Critics argue that these kinds of loans lure the working poor into an inescapable cycle of debt.

A new study by the Center for Responsible Lending discovered that ethnicity and race are the top factors that determine the location of payday lenders. In other words, the communities of minorities are the biggest targets for predatory payday lenders.

In fact, in the state of California, payday loan outlets are eight times as prevalent in Black and Latino communities than White neighborhoods. Lenders charge these communities an average of $250 million in paycheck loan fees every year.