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Consumer Borrowing after Cash Advance Bans. High-interest payday loans have actually proliferated in the last few years; therefore too have efforts to control them.

Consumer Borrowing after Cash Advance Bans. High-interest payday loans have actually proliferated in the last few years; therefore too have efforts to control them.

Abstract

High-interest payday loans have actually proliferated in modern times; therefore have efforts to too control them. Yet exactly just how borrowers react to such laws continues to be mainly unknown. Drawing on both administrative and study information, we exploit variation in payday-lending guidelines to examine the result of pay day loan limitations on customer borrowing. We discover that although such policies work well at reducing payday financing, customers react by moving with other types of high-interest credit (as an example, pawnshop loans) in the place of old-fashioned credit instruments (for example, charge cards).Read More »Consumer Borrowing after Cash Advance Bans. High-interest payday loans have actually proliferated in the last few years; therefore too have efforts to control them.