Welcome to the AFFIL Consumer Resource Center!
What Is Predatory Lending?
“Predatory lending” is a term for a variety of lending practices that strip you of wealth and income. Predatory loans typically are much more expensive than justified by the risk associated with the loan. Characteristics of predatory loans may include enormous and/or hidden fees, charges for unnecessary products, high interest rates, terms designed to trap borrowers in debt, fraud, and refinances that do not provide you any benefit.
What is a Predatory Loan?
A predatory loan is one that unfair and unsafe. Predatory loans are purposely structured to reap profits for the lender at your expense. These loans pay no attention to your ability to repay them; they are not intended to build your assets, but rather to strip as much wealth from you as possible using tricks and traps.
Who makes these loans? Who Are The Predators? Who Are The Prey?
The predators include many types of lending institutions, from mainstream banks, to tax preparers, to car dealerships, to payday lenders, to rent-to-own stores. The prey are all of us: hardworking Americans of middle and moderate incomes, young and old, students, parents, and grandparents. If you are a person of color, you are even more likely to be the prey of a predatory lender than otherwise.
If I Have a Predatory Loan, What Can I Do About It?
Unfortunately, AFFIL can’t promise that help is on the way, but these are our best suggestions.
1. Contact an AFFIL Ally. AFFIL Allies are locally based organizations who care about consumers. AFFIL Allies come in many forms—they are legal services organizations, private lawyers, housing counselors, credit counselors, military agencies, faith-based organizations, grassroots advocacy organizations, and others. Find one in your area who may help.
2. File a Complaint. You should always file a complaint when you have a predatory loan for two reasons. First, you may be able to receive remuneration if your lender broke the law. Secondly, when you file a complaint you let state and federal agencies know that there is a serious problem with lending in America.
3. Contact you state legislator. Write to your state legislator and ask that your state regulate loans to better protect you.
4. Contact your federal legislator. You may also write to your U.S. Congressperson and Senators. It is important that they know your story so they can consider changing federal laws.
5. Find a lawyer. Visit the National Association of Consumer Advocates’ webpage at to find a lawyer near you, at www.naca.net. Note: AFFIL is not a lawyer referral service and cannot refer you to a specific lawyer.
6. Fight to fix the problem for everyone! Become a member of AFFIL and get engaged in the fight to make lending safe and fair for everyone.
