Online payday lenders provide short-term, high-cost loans to individuals for immediate cash needs, with repayment typically due on the borrower's next payday. These loans are accessed and approved online, and when it's time for repayment, the lender is often authorized to electronically debit the loan amount and fees directly from the borrower's bank account. Supporters of payday lending claim it gives consumers convenient online options for funding that is fast and easy to obtain. Opponents say online payday loans carry substantial fees and extremely high Annual Percentage Rates, sometimes exceeding 400%. They claim these lenders present significant dangers, primarily because they can create a cycle of debt through extremely high interest rates, short repayment terms, and excessive fees. They often target financially vulnerable individuals, and online operations can introduce additional risks related to fraud, illegal activities, and data security.

Pending Legislation: H.R.1658 - SAFE Lending Act of 2025
Sponsor: Rep. Suzanne Bonamici, Suzanne (OR)
Status: House Committee on Financial Services
Chair: Rep. French Hill (AR)