The Federal Reserve has lowered the federal funds rate twice in the past four months. These cuts can sometimes help would-be borrowers by reducing interest rates for things like automobile loans or credit card debt. Or so one would think. For a large number of Philadelphians, particularly those already saddled with debt and without significant savings, these cuts do nothing to stave off the groundswell of predatory lenders seeking to take advantage of the economically vulnerable.

While some loans may appear to help borrowers in the short term, the reality is that predatory lending traps its victims in debt, leaving them without enough money to pay for even basic expenses such as food and housing. Getting caught in a cycle of predatory lending can mean never-ending interest payments and long-term debt that makes financial security for the borrowers impossible. The fallout from predatory loans affects not only the individuals and families targeted by these lenders, but the whole city—while the lenders simply profit and walk away.

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