Low-income families locked out of mainstream banking don’t just go without — they borrow more, and they pay dearly for it. In the wake of the recession, payday lenders multiplied to fill the gap, trapping borrowers in cycles of high-cost debt that standard loan documents make nearly impossible to understand. This MAF special report names that landscape for what it is — a credit desert — and introduces a practical tool to fight back: the Financial Facts label, a Nutritional Facts-style disclosure designed to make loan costs clear, comparable, and impossible to obscure.
What’s inside- Data on the growth of predatory lending and its concentration in low-income neighborhoods
- Household debt-to-income trends showing low-income families bear the sharpest debt burden
- Results from MAF’s 2011 pilot test: participants were 3.5x more accurate and 5x faster identifying monthly loan costs using the Financial Facts label versus standard loan documents
- How the Financial Facts label works — and why the familiar format matters for consumer comprehension
- Policy recommendations for standardizing small-dollar loan disclosures, including minimum wage increases, expanded tax credits, and CFPB action
