"We’re very concerned that if this [Consumer Financial Protection Bureau (CFPB) rule ending payday debt] goes through ...," said Pat Crowley, a spokesman for the Ohio Consumer Lenders Association. "There will be less credit available, and those who find a resource will pay more."
Many economists fear that he is correct — and that low-income consumers will be the ones who are hurt.
In 2004, Georgia made most short-term, high-interest loans illegal. In the wake of that law, Georgia residents paid more bounced-check overdraft fees and became more likely to file for bankruptcy, according to a report by the Federal Reserve Bank of New York.
A sweeping study of bans on payday lending, scheduled to be published soon in The Journal of Law and Economics, found similar patterns in other states.
Saturday, July 23, 2016
US Consumer Financial Bureau Restrictions On Payday Lending Will Increase Borrowers' Bankruptcies And Borrowing Costs
Posted By Milton Recht
From The New York Times, DealB%k, "Payday Loan Limits May Cut Abuse but Leave Some Borrowers Looking" by Stacy Cowley:
Posted 7/23/2016 07:00:00 AM