From Payday Loans to Home Mortgages: Racial Discrimination in Access to Capital

Payday loans are average interest rates of 395 percent on a two-week loan, the industry is notorious for extending loans regardless of a borrowers’ ability to repay. This frequently traps borrowers in a horrible cycle of debt. In states like Missouri, where there is an astonishing rate cap of 1,950 percent APR, there are more payday loan storefronts than McDonald’s, Starbucks, and Walmarts combined. But closer examination reveals that payday loan storefronts are not randomly scattered throughout cities and states. They are heavily concentrated in poor communities, and in particular, poor communities of color.