Predatory lending

Predatory lending refers to the practice of convincing borrowers to agree to unfair and abusive loan terms. This could be done either through outright deceoption or through aggressive sales tactics, taking advantage of borrowers' lack of understanding of extremely complicated transactions. Predatory loans, for instance, for the purchase of a home, could lead to foreclosure. Opponents of predatory lending often include transactions such as tax refund anticipation loans (or RALs), pay day loans, and credit cards, along with mortgage lending, in the term.

Anti–predatory-lending organizations such as ACORN argue that predatory loans are usually made in poor and minority neighborhoods where better loans are not readily available, and that the loss of equity and foreclosure can devastate already fragile communities.

Some critics have charged Wells Fargo with being a predatory lender.

Organizations such as AARP and ACORN have worked to stop what they describe as predatory lending. ACORN in particular has targeted specific companies such as Household Finance and H&R Block, successfully forcing them to change their practices. These groups have also spearheaded legislation that would make forms of lending deemed to be predatory illegal.