Skip to content
Subscriber Only

How Payday Loans Leave Cash-Strapped Borrowers Unbankable

Barry Barker’s flock of macaws and kites were squawking for food last year when he went online for a payday loan to save them. The automatic debits got so costly he had to close his bank account to stop them.

Barker, 71, a field biologist in Florida who runs a nonprofit shelter for exotic animals, isn’t alone. Thousands of Americans exit the banking system after turning to last-resort lenders, according to a study released yesterday by the Pew Charitable Trusts. Of 252 online payday-loan borrowers surveyed by Pew as part of a three-year research project, 22 percent closed a checking account or had one closed for them.