A new report states Tennessee has the most predatory lenders in the country with 1,200 locations in 89 of the state’s 95 counties.
The non-profit Metro Ideas Project (MIP) examined state licensing data for their “Fighting Predatory Lending in Tennessee” report released last week.
MIP states predatory payday lenders and check cashing establishments could carry fees that exceed the original amount customers were loaned in the first place. The report found people without 4-year college degrees, home renters, African-Americans, and those earning less than $40,000 a year are more likely to use a payday loan.
Shelby County topped the list with 232 predatory lending locations in the county. Davidson County ranked second, with 109 locations. Hamilton County (71), Knox County (68), and Rutherford County (50) rounded out the top five counties in the state.
Madison County had the highest concentration of predatory lenders with 29.53 locations for every 100,000 residents. Shelby (24.74), Putnam (24.38), Maury (22.59), Bradley (22.53), Robertson (20.76), and Washington (20.74) counties were the top seven locations with the highest concentrations of predatory lenders.
MPI says their findings reaffirm “these institutions are pervasive in communities of poverty, color, and low educational attainment.” The report adds the state’s regulatory environment “preempts any meaningful local efforts to reform or regulate the terms of the loans that payday lenders can offer.”
The report calls for a three-pronged strategy to combat predatory lending by posting clear warnings to consumer the establishment is a predatory lender, requiring additional local permits, and creating alternative non-profit lending opportunities for residents.