CFPB Report Summarizes Payday Loan Extended Payment Plan Usage

The CFPB recently published a report describing State payday loan extended payment plans and their use.  Extended payment plans, often considered an “off ramp” for consumers, allow consumers to repay outstanding payday loan installments at no additional charge.  The specific provisions of extended payment plans depend on the law of the state in which the loans are taken—the report summarizes the varying provisions relating to installments, plan length, allowable fees, frequency of use, consumer eligibility, and disclosures in the sixteen states that have adopted extended payment plan laws.

The report discusses the benefits of extended payment plans for consumers, particularly in comparison to rollover plans.  It also summarizes state-reported, publically available extended payment plan usage rate data in comparison to rollover plans.  The data aligns with previous CFPB publications finding that lenders have little incentive to promote extended payment plans and, in many cases, there is a monetary incentive not to.

The CFPB “will continue to monitor lender practices that discourage consumers from taking extended payment plans and take action as necessary.”