Ronald J. Mann of Columbia has written Do Defaults on Payday Loans Matter? Here's the abstract: This essay examines the effect on a borrower’s financial health of failure to repay a payday loan. Recent regulatory initiatives suggest an inclination to add an “ability to pay” requirement to payday-loan underwriting that would be fundamentally inconsistent with […]
Category Archives: Predatory Lending
by Jeff Sovern RTO kiosks are, as far as I know, a new way to buy/rent goods. In the past, stores specialized in rent-to-own financing/renting, where consumers could agree to rent an item and make payments (typically weekly) for the item until they had purchased it, or alternatively chose to surrender it. RTO businesses, unregulated by Truth […]
Here. The subtitle reads: Consumer-Debt Adviser Howard Dvorkin Has Financial Links to Firms Such as Payday Lenders That Often Drive People Deeper into Debt. And here's the beginning of the article: One of the most prominent advocates for consumer debt relief has ties to firms that can leave people deeper in debt. Howard S. Dvorkin is […]
Amy Schmitz of Colorado has written Females on the Fringe: Considering Gender in Payday Lending Policy, 89 Chicago-Kent Law Review (2014). Here's the abstract: Payday lending may provide a much-needed safety net for some consumers in need of quick cash for emergencies. However, data suggest that most payday loan borrowers become repeat users caught in a […]
Frank Pasquale of Maryland has a terrific op-ed in today's Times, The Dark Market for Personal Data, about lists of consumers with various characteristics. An excerpt: There are three problems with these lists. First, they are often inaccurate. For example, as The Washington Post reported, an Arkansas woman found her credit history and job prospects wrecked […]
by Jeff Sovern The op-ed is here, at Forbes.com. Except that if you want to find out why everything Warren said is wrong, maybe the op-ed wouldn't be the place to look. Here's the lead: Why do people borrow? To hear law professor turned Senator Elizabeth Warren, it is because they are seduced by rapacious […]
The Times has the story under the headline Tougher Shield for Soldiers Against Predatory Lenders. The proposed regulation closes loopholes like these described in the Times story: The law set a 36 percent interest rate cap on a range of high-cost loan products. But the protections applied to a narrow sliver of loans, covering only […]
Ron Elwood has written The Verdict Is in: Payday Lending Is Guilty as Charged, Clearinghouse Review: the Journal of Poverty Law & Policy. Here's the abstract: The payday loan is symptomatic of the failure to provide access to reasonably priced credit. By understanding the fallacies in the arguments used to justify payday loans, advocates can […]
John Oliver's comedy news-in-review show on HBO, "Last Week Tonight," had an excellent segment on payday loans last night. The show was well researched and probably exposed many people to these issues for the first time. Among other things, it covers the payday industry's reliance on recidivism (citing Center for Responsible Lending research and an […]
The New York Times has run several troubling pieces recently on predatory subprime car lending, most notably here. Today's Times includes an editorial that states: Dealers who can offload loans to banks before the loans fail take the same rapacious approach that mortgage lenders took in the run-up to the recession. They prey on less […]