The Challenge of Regulating Payday Predators
Astra Taylor details the challenges in regulating payday lenders in an excellent piece for The New Yorker.
While payday lending loan sharks tend to be slippery creatures, Taylor notes the success in North Carolina while also detailing the challenges in Georgia.
Here’s a bit of what she has to say:
Instead of half-measures, some advocates would like to see officials set their sights on getting rid of payday, auto-title, and installment lending altogether. Payday lending is already essentially off limits in fourteen states and in the District of Columbia, and studies from North Carolina and Arkansas, both of which eliminated payday lending in the past decade, show that borrowers there have been better off, a result that stands in notable contrast to lobbyists’ emphatic claims about the devastating impact that reducing access to their products will have on cash-strapped families. If the government’s goal were truly to eradicate predatory lending, as opposed to simply reining in the industry’s most egregious practices, the simplest approach would be for it to set an interest cap on all small-dollar loans. But this isn’t an option for the bureau, because it is prohibited under the Dodd-Frank Act from regulating interest rates.
For more on stopping payday lending loan sharks, follow @TNCitizenAction