The problem of predatory lending, from triple digit payday loans to title loans, is a systemic one in the United States. As we know, predatory lenders filled the void left when retail bank branches fled unprofitable redlined communities in the mid-to-late 20th century. So if you’re looking to support the cause and play a role in eliminating predatory lending in our lifetime, here are five ways you can make a difference today.
- Understand what is happening in your own backyard. Google “predatory lending in my state” or “small dollar interest rate” and look to see what the interest rate cap is on small dollar consumer loans. For example, as reported in January 2022 by the Tennessean:
For most consumer loans, interest is only one of the permitted charges and is usually not the biggest charge…for flex loans, the interest rate can be 24% per year, and the so-called “customary fee” as high as 255% per year, for a total annual rate of 279%.
2. Connect with the non-profits and advocacy groups working for change. Buoy is piloting in San Antonio, TX, and here is a list of some of the organizations working for consumer lending reform:
- Texas Appleseed, a public interest justice center
- RAISE Texas, a state-wide public-private coalition
- San Antonio Area Foundation, funding grants and programming in the city
- LiftFund, a CDFI-designated Small Business Lender
- Organizations like this exist in every state, along with many more economic development government organizations, non-profits, partnerships and credit unions
3. Check out your benefits at work. Do you have access to credit through your employee benefits with programs like Employer-Sponsored Loans? While you may not personally be struggling to make ends meet, think about all of the diverse individuals who work at your company, from the CEO to the janitorial staff. Is it safe to assume that everyone is in the same secure socioeconomic position? Or should we take a second look to see if we can offer everyone on the team access to affordable credit should they need it?
4. Get curious about your employees’ needs. If you manage entry-level employees that are living in areas serviced by predatory lenders, there may be an unspoken need for a better option when financial emergency strikes. At Buoy, we connect your employees with the small dollar loan program that fits your business — and we work with employers of any size, in any city.
5. Get involved. Buoy isn’t going to solve the problem of predatory lending without a ton of help from individuals like you working to spread the word about Employer-Sponsored Loan benefits and the reality that our generation has a chance to fix this age old problem of predatory lending in American communities. So get in touch and shout it from the rooftops — we can fix this together!
Buoy Holdings is an Ithaca-based benefits consultant on a mission to end predatory lending in America. Schedule a meeting to learn more.
