Borrowing while poor : evaluating payday loan regulatory arrangements / Brendan D. Dooley.

Format:

Book

Author/Creator:

Dooley, Brendan D., author.

Series:

SAGE Business Cases.

SAGE Business Cases

Language:

English

Subjects (All):

Payday loans--United States--Regulation--Case studies.

Payday loans--Corrupt practices--United States--Case studies.

Loans--Law and legislation--United States--Case studies.

Consumer protection--Law and legislation--United States--Case studies.

Physical Description:

1 online resource : illustrations.

Other Title:

Borrowing While Poor

Place of Publication:

London : SAGE Publications: SAGE Business Cases Originals, 2020.

Summary:

Millions of chronically poor Americans live on the financial precipice—one dental bill, car repair expense, or abbreviated shift at the plant—away from bankruptcy. A substantive portion of these cases represent minimal credit risks because they merely need an additional sum to keep them afloat until their next paycheck arrives. What is to be done? Payday loans have cropped up across the United States to provide that access, but for a price. Many view the business practice as predatory and have sought ways to regulate the growing industry. Politicians assign the duty of regulating to agencies like the Consumer Financial Protection Bureau because many voters have come to expect that there is a primary duty of government to protect the consumers. Industry insiders press back against the narrative, arguing they provide a much-needed service to a population that traditional banking has ignored. They say the interest rates they earn are not a result of predatory practices but a product of servicing high loans with notably higher default rates and having to absorb much greater operating costs than do typical banks. The case study asks students to consider the advantages and limitations of two potential approaches to resolving the debate. The first outlines various efforts on the part of government to ban payday lending, or to establish rules that amount to a ban on the business through less direct means, such as limiting their profit margin. The second set of alternatives involve a potential middle path. Three alternatives are outlined, which involve establishing a means to access banking through the U.S. Postal Service, imposing modest regulations on the loan payback period, or working within the existing banking structure.

Notes:

Includes bibliographical references and index.

Description based on XML content.

ISBN:

1-5297-3522-X

OCLC:

1162865817