Daily Archives: 5-October-2020

APR of Payday Loan

I watched a video (Figure 2) that shows Rep. Katie Porter (Figure 1) grilling the Director of the Consumer Financial Protection Bureau (CFPB) Kathy Kraninger in regards to the calculation of a payday loan's Annual Percentage Rate (APR). This blog post will show how to compute the APR for the payday loan example Rep. Porter attempts to get Ms. Kraninger to compute. I am not sure Ms. Kraninger knows exactly what APR is. The questioning is a bit uncomfortable because Ms. Kraninger is in no mood for a math exercise and Rep. Porter is not going to give up. Ms. Kraninger clearly is uncomfortable, but her discomfort is nothing compared to the discomfort experienced by a payday loan customer. Continue reading

 
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