Category Archives: Predatory Lending

Jim Hawkins Asks if Bigger Companies Are Better for Low-Income Consumers

Jim Hawkins of Houston has written Are Bigger Companies Better for Low-Income Borrowers?: Evidence from Payday and Title Loan Advertisements, Forthcoming in the Journal of Law, Economics and Policy. Here is the abstract: Payday lending and title lending markets are dominated by a small number of large lenders.  Recent policy intervention into these markets in […]

Russell Paper on Separating and Pooling in Response to Consumer Financial Mistakes

Jacob Hale Russell of Stanford has written Misbehavioral Law and Economics: Separating and Pooling in Responses to Consumer Financial Mistakes. Here is the abstract: Consumers’ choices in financial contracts do not always tell us what they really want. Put differently, revealed preferences are sometimes unreliable indicators of actual preferences. For instance, consider two consumers who […]

More on the Attempt to Delay Predatory Lending Protections for Soldiers

Scott blogged earlier today about the pending vote to delay protections. Here's Ed Mierzwinski's HuffPo post, House Launches Attack on Servicemember Lending Protections, and Chris Morran of Consumerist weighs in with Congress May Delay Predatory Lending Protection For Military Personnel. Update: the Times' Brent Staples adds "The offending legislation, now before the House Armed Services Committee, deserves to […]

Barney Frank’s Autobiography and “Gotcha” Remarks

by Jeff Sovern I just finished listening to the audio version of Barney Frank's autobiography, Frank: A Life in Politics from the Great Society to Same-Sex Marriage, which Frank reads himself. I listened to it to learn more about consumer law–Frank was so involved in creating the CFPB that the statute doing so carries his […]

Johnston Paper Questions Whether Product Bans Help Consumers

Jason Scott Johnston of Virginia has written Do Product Bans Help Consumers? Questioning the Economic Foundations of Dodd-Frank Mortgage Regulation. Here is the abstract: The system of residential mortgage contact regulation enacted by the 2010 Dodd Frank Wall Street Reform and Consumer Protection Act of 2010 has been justified as necessary to prevent lenders from […]

Watch the CFPB’s Payday Lending Hearing

The CFPB's field hearing on payday lending is underway, and is being livestreamed at the Bureau's website. Watch it here.

Where Are the Loan Sharks?

by Jeff Sovern Not that I need one, but my question is prompted by my expectation that during the Consumer Financial Protection Bureaus's field hearing today on payday lending, the Bureau will propose new restrictions on payday lending.  Critics may claim that the restrictions will drive consumers to loan sharks.  For a past example of […]

Times: Consumer Protection Agency Seeks Limits on Payday Lenders

Here.  An excerpt: At the center of the regulations being considered, the people familiar with the matter said, is a requirement that lenders assess whether borrowers can repay loans — interest and principal — at the end of a two-week period by examining their income, other debts and their payment history. Few people can, the […]

Ronald Mann on Whether Payday Loan Defaults Matter

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 […]