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High Cost Lenders

Variable Definitions:
High Cost Lenders: The number of high cost lenders, including payday lenders and vehicle title lenders, in a given area

California Department of Business Oversight (provided by the Los Angeles County Department of Consumer & Business Affairs Center for Financial Empowerment) 

Years Available:
2019, 2022 

Why are these variables important to measure?

High Cost Lenders
In this dataset, high cost lenders include payday lenders and vehicle title lenders. Also known as predatory lenders, high cost lenders market their loan products to consumers who need quick cash but may not qualify for loans at traditional financial institutions because of their credit history or income. However, high cost loans can be dangerous as they carry an average annual percentage rate (APR) of 391% as compared to about 10% for banks and credit unions. These extremely high interest rates, often accompanied by additional fees, mean that loan recipients who cannot pay back their loans on time quickly accrue debt that can become insurmountable and financially devastating. Especially in low-income communities that lack access to banks and credit unions, consumers often turn to high cost lenders for help paying bills. 

Center for Responsible Lending. “The Debt Trap of Triple-Digit Interest Rate Loans: Payday, Car-Title, and High-Cost Installment Loans.” March 2019. Link

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