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The payday loan market is typically characterized by 400 percent APRs, but banks and credit unions can be profitable at double-digit APRs as long as applicable rules allow for automated origination.15 These APRs for small loans borrowed for short periods of time need not be as low as the APRs for credit-card debt to be broadly viewed as fair. For example, 80 percent of Americans think that a $60 charge for a $400, three-month loan is fair, though its APR is 88 percent.16 (See Figure 1.) That $60 cost is roughly six times lower than average payday loan pricing for the same loan. But bank or credit union loans or lines of credit with three-digit APRs should attract additional regulatory scrutiny—because those rates are unnecessary for profitability, because they may be indicative of inadequate underwriting, and because the public sees them as unfair, meaning that they could create reputational risk for a bank or credit union. And APRs should decline as loan sizes increase, because the relatively high APRs needed for very small loans to be profitable are not justified for larger loans.