Tribal lenders have charged up to 600% APR on short-term loans

'Usury' is the act of lending money at an excessively high interest rate

Laws regulating predatory lending are called usury laws and vary from state to state. Payday lending has historically been exempt from some states' usury laws, and some lenders have found loopholes in state laws or business structures that allow them to provide short-term loans with high interest rates.

Tribal courts handle justice on reservations, but face strict limits on whom they can prosecute

Reservation-based courts handle civil and criminal cases, but federal law sharply limits their authority over non-tribal members. As a result, non-Native individuals who commit crimes on reservations often fall outside tribal jurisdiction, creating potential gaps in accountability.

Federal law requires payday lenders to meet certain transparency requirements, but states have their own regulations

Federal law treats payday lending like other lines of credit, meaning it requires lenders to disclose the loan's interest rate and its "finance charge," a dollar amount expressing the full cost of the loan. But states have their own regulations around payday lending, hence why it isn't allowed in every state and why the industry looks so different across the country. These regulations are often part of a state's usury laws.

Modern payday lending came about in the late 1990s

In the early 1900s, unlicensed "salary lenders" used to give consumers one-week loans at annualized percentage rates of more than 100%. But wage garnishment and financially abusive practices led some states to create special licenses for lenders and implement rate caps to protect consumers. In the 1990s, a series of deregulations in various states opened the door for the modern payday lending industry to take off.

Payday loans typically have higher interest rates than cash advances

Cash advances and payday loans are both short-term loans that allow borrowers to access cash quickly. Payday loans are much shorter-term, often due in two weeks or by the borrower's next paycheck, and have much higher interest rates.

The costs and fees for a payday loan include a 'finance charge'

Payday lenders typically make money via finance charges, a percentage or dollar amount that the borrower owes the lender per $100 borrowed. While the finance charge can range from $10 to $30 for every $100 borrowed, this would equate to an annual percentage rate of almost 400 percent for a two-week loan.

Tribal casinos have generated billions in revenue

After Congress passed the Indian Gaming Regulatory Act in 1988, granting tribes the legal right to operate casinos on reservation land, tribal gaming expanded dramatically. Today, tribal gaming ranks among the largest revenue sources for participating tribes.

A third of Americans don't have the cash they need to cover a $500 emergency, according to a 2023 Federal Reserve survey.

Military bases were once targets for payday loans and other predatory lending

The Military Lending Act of 2006—a federal law—capped the interest a lender can charge an active-duty soldier at 36% after the Department of Defense criticized payday lenders for targeting young soldiers with high-interest, short-term loans. However, many towns near military bases still have predatory businesses that critics say take advantage of army families living paycheck to paycheck. (Some readers may experience a paywall.)

Title loans are a type of short-term loan with high interest rates

Title loans allow borrowers to use their vehicle's title as collateral for a short-term loan. Similar to payday loans, title loans often have high interest rates and are mostly structured to last around 30 days. If title loans aren't repaid, the lender can take possession of the borrower's vehicle.

Payday lenders spent more than $5M on lobbying efforts in 2025

Payday lenders largely oppose rate cap policies, increased borrower risk-assessment requirements, and other regulations that would effectively shutter their industry. In 2025, the payday lending industry lobbied against interest rate limits on payday loan apps.

In 2023, Native Americans had the lowest life expectancy at birth among all racial and ethnic groups

Native Americans and Alaska Natives face significant health disparities linked to chronic underinvestment in reservation health infrastructure, poverty, and multigenerational psychological harm—often called historical or inherited trauma.

Supporters of payday loans say banning them would harm low-income Americans

Many argue for a federal policy that would cap interest rates for these loans, but payday lenders say that would make it impossible for them to make money, effectively forcing them to close up shop. As a result, some argue that the policy would prevent low-income, unbanked, and traditionally high-risk borrowers from accessing credit when they need it. (Some users may experience a paywall.)

Payday lenders are more highly concentrated in neighborhoods with high poverty rates

Research from the Federal Reserve Bank of Chicago shows that payday lenders in Illinois were more densely populated in zip codes with high poverty rates. The data also shows that payday lenders were more likely to cluster in zip codes where the highest percentage of residents are minorities.

People who take out payday loans often know they are a bad deal

Despite common criticism that payday lenders take advantage of uninformed borrowers, some people who take out payday loans know they are usually a bad deal, but often feel like they don't have any other options. Payday loans are often considered a symptom of poverty. (Some users may experience a paywall.)

A 1975 law let tribes run their own programs instead of relying on federal bureaucracies

The Indian Self-Determination and Education Assistance Act allowed tribes to contract directly with the federal government to administer their own health, education, and social services—reversing policies from the "termination era."

Payday lenders usually require borrowers to post-date a check or provide access to an electronic bank account

If borrowers can't pay back the loan, they can be subject to overdraft fees from their bank and other fees from the payday lender—further exacerbating the debt borrowers face.

Research shows that payday lending advertisements target minorities

A University of Houston Law Center study found that despite only making up 23% of payday loan recipients, Black people appear in 35% of advertisements. Similarly, 77% of the physical payday lending and auto title lending storefronts in the study targeted racial minorities.

Banks have increased small loan programs since 2018, upping competition for payday lenders

One of the reasons payday lending flourished for nearly two decades is that most banks charged high overdraft fees and didn't offer small loans. However, since 2018, banks have increased their small loan options. Supporters say this provides safer alternatives for consumers, as banks are subject to more regulatory measures and are less likely to allow consumers to keep rolling over loans.

Some argue that advance payday apps aren't markedly different from payday loans

Some apps, like EarnIn, allow users to get money from their paycheck in advance. These apps access users' banking information, allowing the company to immediately take back any borrowed money and track users' financial situations to evaluate their risk. Unlike traditional payday lenders, these apps often waive the right to sue users who don't pay back the initial principal and don't charge interest, but rather ask users for a tip. (Some users may experience a paywall.)

The US has 575 federally recognized tribal nations, each a sovereign government.

Google banned ads for loans due within 60 days and interest rates exceeding 36% or higher

In 2016, Google said it would stop allowing payday lenders to advertise on the search engine. According to the company, this decision was made to protect users from deceptive and harmful financial products.

Native American tribes still are waiting for museums to return the remains of their ancestors

The remains of more than 100,000 Native Americans are held by prestigious US institutions, despite a 1990 law meant to return them to tribal nations. Here’s how their ancestors were stolen—and how tribes are working to get them back.

Find out ways to get lower rates on private loans, such as applying with a cosigner.

Native religious practices were suppressed for centuries before receiving federal protection in 1978

During the first two centuries of American history, the government frequently banned Native ceremonial dances, took sacred sites, and enrolled children in boarding schools where they were prevented from practicing their faith. The American Indian Religious Freedom Act of 1978 committed the federal government to safeguarding Native spiritual practices.

In 2025, the 'two strikes and you're out' rule took effect to protect consumers from repeated attempts to withdraw money

After years of being delayed by litigation, a 2024 US Supreme Court ruling upheld a law that prevents lenders from attempting to take payments from accounts with insufficient funds more than twice without reauthorization. This tactic is commonly used by payday loan companies, which technically require repayment on the day borrowers receive their paychecks.

North Carolina was the first state to ban payday lending

In 2001, the North Carolina state legislature let a 1997 law that permitted the small-dollar loans expire—effectively banning payday loans. In 2005, the NC bank commissioner ruled that Advance America, a payday lending company, had been operating in the state illegally.

Native Americans were not granted US citizenship until 1924

The Indian Citizenship Act granted citizenship to all Native Americans born in the US, more than 130 years after the Constitution's ratification. Even then, some states continued to deny Native Americans the right to vote for decades.

How the Navajo nation works

Tribal reservations control over 89,000 square miles of land in the US, roughly 2.5% of all US land. While individual tribes are recognized as sovereigns, they are not viewed as countries by the US government. Learn how the Navajo nation in...

The reservation system gives tribes limited self-governance while keeping them under federal control.

Houston, Texas depends heavily on payday loans

In 2024, people in Houston took out payday loans at a higher rate than the national average. In Texas, the average payday loan interest rate is 664%.

Some tribes push for national parks to be under Indigenous control

Ojibwe author and academic David Treuer talks about his push for 80 million acres of American national park land to be returned to Indigenous stewards. Treuer proposes the government grant control of this land to a consortium of tribes, which would maintain and manage it for use by all Americans.

The EPA works directly with Indigenous nations to protect native lands

Through the National EPA-Tribal Science Council, the agency works directly with federally recognized tribes, supporting air and water monitoring, pollution cleanup, and environmental restoration. Special grant programs also exist to enable tribes to develop their own environmental programs and enhance their technical capacity.

Native students fought back against forced assimilation at US boarding schools

Despite harsh conditions, Native American students preserved their identities by secretly speaking their languages, maintaining cultural practices, and, in some cases, running away.

Buy now, pay later loans typically split payments into 4 installments

While they're marketed as "interest-free" loans, BNPL loans often have penalties for late payments, such as late fees in varying amounts depending on the BNPL company used to make the purchase. BNPL users often pay 25% of the BNPL loan at checkout, and then pay the remaining balance in three more installments over the course of roughly six weeks, depending on the BNPL company and agreement.

Use this student loan calculator to estimate monthly student loan payments.

Borrowers were increasingly defaulting on private credit loans as of early 2026

Risks in private credit investing include the industry's lack of transparency and the ability of businesses to borrow more than a bank might allow against their debt. Some borrowers in early 2026, for instance, likely did not expect interest rates to be so high for so long, which could be contributing to an uptick in defaults.

A 1990 law forced museums and federal agencies to return Native remains and sacred objects

The Native American Graves Protection and Repatriation Act required federally funded institutions to inventory and return Native American human remains and sacred items to descendant tribes.

The Dawes Act of 1887 broke up communally held tribal lands

Sometimes called the General Allotment Act, the Dawes Act divided reservation land into individual plots assigned to Native Americans, while "surplus" land was sold to white settlers. The policy led to Native tribes losing roughly 90 million acres, about two-thirds of their remaining land.

In 2014, there were more payday loan stores than McDonalds

That year, there were more than 20,000 payday lenders in the US, according to the St. Louis Federal Reserve, and 14,267 McDonald's locations. Politicians and consumer advocates frequently cited this statistic as a selling point for increased regulation.

In the 1950s, the federal government tried to dissolve tribal nations and end their sovereignty

A federal policy called "termination" withdrew official recognition from more than 100 tribes in the 1950s, cutting off federal services and subjecting reservation land to state taxes and sale.

Over 25% of Americans regret using BNPL due to unexpected costs

Almost 24% of buy now, pay later users have missed payments, with younger users (32% of 18- to 29-year-olds) being more likely to fall behind on payments than their older counterparts. (Only 12% of adults age 60 or over had done the same.)

The Red Power movement pushed back against poverty and broken treaty rights in the 1960s and 1970s

Inspired by the Civil Rights Movement, Indigenous activists founded the American Indian Movement, a national advocacy organization, to protest excessive police violence and federal violations of treaty rights, drawing national attention to conditions on reservations.

Paying a fee to delay paying back a loan in full is called 'rolling over' the loan

Borrowers sometimes roll over loans when they aren't able to pay back the full principal balance and accrued interest. A rollover extends the amount of time the borrower has to repay the loan, but does not decrease the amount of money the borrower has to pay back.

A 'debt trap' refers to the need for loans or credit to cover the expenses incurred from other debt

Debt traps can be caused by unforeseen expenses or inadequate savings and can be a brutal cycle to break. At the end of 2025, total household debt in the US reached $18.8T, according to data from the Federal Reserve of New York.

For everyday Americans, a relatively high national debt can lead to higher interest rates on financial products such as mortgages.

Meet a payday lender who tried to fight the industry

Phil Locke once ran more than 40 payday lending stores in Michigan before walking away from lending in 2012. Locke left because he said he felt guilty about being a predatory lender. He tried to become a consumer protection advocate and influence reform, but ended up returning to the industry. (Some users may experience an email wall.)

The US government ran boarding schools designed to erase Native American identity

From the late 19th century into the 20th century, the federal government sent Native children to boarding schools under the philosophy of "kill the Indian, save the man." Children were forbidden from speaking their languages or practicing their cultures, and many endured abuse.

Alaska has the highest lifetime credit card debt of all US states at $484,620

That's 21.8% above the national average, partly due to Alaska's high cost of living and remote nature, which makes shipping in food and fuel more expensive. Iowa had the lowest average lifetime credit card debt out of all the states in the US at $319,740.

'Floating rate' loans periodically adjust their interest rates in accordance with economic conditions

When the Federal Reserve began raising interest rates in 2022 to combat inflation, interest payments borrowers owed to private credit lenders increased accordingly. Private credit funds benefited as loan returns increased, making the asset class attractive to investors at the time.