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Payday Lenders Provide Desired Service

to Lower and Moderate Income, Middle-Educated, Young American Families

In a study entitled, “An Analysis of Consumers’ Use of Payday Loans,” written by Gregory Elliehausen, Division of Research and Statistics, Board of Governors of the Federal Reserve System and Financial Services Research Program, The George Washington University School of Business, the author describes the demographic characteristics of payday loan customers and considers whether they make rational decisions and if they benefit from access to credit.

Elliehausen notes that only 2 percent of U.S. adults use payday loans at any one time and provides a detailed picture of the typical payday loan customer, including who they are, how they use the service, and their decision-making process.

According to the monograph, customers that use payday loans:

  • Skew young; 63 percent have children at home

  • Have lower and middle incomes; 41 percent earn between $25,000 and $50,000; 39 percent report incomes of $40,000 or more

  • Are educated; 90 percent have a high school diploma or better, with 54 percent having some college or a degree

  • Have limited liquid assets and savings, most use other forms of credit

  • Have characteristics that may limit their access to credit

  • Use payday loans moderately, as intended for short-term use

  • Are aware of the cost of their most recent payday loan

  • Consider the alternatives, are satisfied with their decision

  • Benefit by having access to payday loans

Elliehausen concludes that, “Most payday loans are used to pay unexpected expenses or expenses that could not be postponed…If payday loan customers live from paycheck to paycheck with very little discretionary income, even small expenses may cause financial problems and make emergencies a frequent event. In such cases, even frequent use of payday loans may be better than the alternatives.”

Connecting With Our Communities

Managing household finances can be a daunting task. However, by using solid budgeting and savings techniques, you can accomplish major financial goals. In the Customer Resource Center, CFSA offers a variety of payday advance resources that support and encourage responsible lending practices, and highlight the vital role of our members’ stores in neighborhoods near you.


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Here you will find an aggregate of industry research, comprehensive data, and benchmarking tools from the short-term lending industry. They cover all payday advance business areas – consumer demographics, media hits, the latest policy initiatives, among others. Click here to access to the partner's resource library.

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CFSA works at the federal, state, and local levels educate legislators and regulators about the role of payday advances in the broader financial services arena. This section provides resources for policymakers who believe in access to credit, want to preserve financial options and ensure balanced, substantive consumer protections. Click here to enter the Policymaker Resource Library.