New rules loosen requirements of payday lenders

WATCH: New rules loosen requirements of payday lenders

MEMPHIS, Tenn. — Payday lenders are scattered throughout Memphis offering fast cash, but at what price?

The Consumer Financial Protection Bureau made it easier to obtain a loan.

Payday lenders are no longer required to make sure people can actually afford to repay a loan before getting one.

Content Continues Below

Teresa Moore borrowed money from a payday lender.

“Thinking about what I went through, I don’t want to do that anymore,” said Moore. “Never. And I would never tell nobody to do that.”

Moore said she spent three years and nearly $2,000 paying off a $500 loan.

Payday loans regularly come with high-interest rates, sometimes more than 600-percent.

"They prey on black people, poor neighborhoods because they gonna go in there and end up signing their life away," Moore said.

Elena Delevega is an Associate Professor of Social Work at the University of Memphis. She studies poverty in Shelby County.

“They’re paying ridiculously high percentage interest rate and penalty rates, and they have absolutely no protection,” said Delevega.

She believed the ruling will have a major impact on low-income families in Memphis.

“We have absolutely no legitimate options for them,” Delevega said. “So they will use this less than legitimate option.”

Poverty is a major issue in Memphis.

According to a 2019 poverty fact sheet, the poverty in Memphis was double the rate across the rest of the country.

An issue Delvega said was growing during the coronavirus pandemic as more people become unemployed.

“It’s around 12, 13 percent, so now we have the potential for three times more in poverty,” Delevega said.

Delevega believed it was best to avoid payday lenders.