For many years, there has been intense interest among regulators, legislators, financial institutions, and advocates in the regulation of small-dollar credit products. While there is no universally accepted bright-line definition of small-dollar credit, these are generally loans of under $1,000 used by borrowers to meet immediate liquidity challenges, as distinguished from loans to finance a planned purchase. Typically, small-dollar loans must be repaid over a very short period of time, such as 30 days or less, although there is no inherent reason why small-dollar credit must be extended on a short-term basis. Payday loans are the predominant form of small-dollar credit in the United States, although there are also small-dollar vehicle title loans, pawn loans, deposit advances, refund anticipation loans, and installment loans.
