Payday Lending in Minnesota
In 2020, 177,733 payday loans were taken by 26,938 borrowers throughout Minnesota, according to the Minnesota department of Commerce. This equates to 7 loans per borrower on average. In order to receive a payday loan, borrowers must have a job, however. With unemployment skyrocketing over 400% from May 2019, at 2.7%, to May 2020, at 11.1%, these high payday loan numbers give rise to deep concern, as the rate of payday loans taken were far from a reflection of the Minnesota unemployment rate’s fluctuation. The grip of predatory lenders has only strengthened in the face of pandemic-induced economic hardship.
There is reason to have hope, though. In 2012 the number of payday loans taken in the state reached 381,000. In the past 8 years of advocacy, the number of payday loans has been cut in half. As Minnesotans advocate within their communities, we see these numbers decreasing. There is still much work to be done, though, for the thousands of consumers being brought and kept in the debt trap each year.