Consumer Borrowing after Cash Advance Bans

Federal Reserve Board

Stanford Law Class

Abstract

High-interest payday loans have proliferated in the past few years; therefore have efforts to too control them. Yet exactly exactly how borrowers react to regulations that are such mainly unknown. Drawing on both administrative and study information, we exploit variation in payday-lending rules to examine the result of pay day loan limitations on customer borrowing. We realize that although such policies work well at reducing payday financing, consumers react by moving to many other types of high-interest credit (as an example, pawnshop […]