High-interest payday loans have actually proliferated in the past few years; therefore too have efforts to control them.


Stanford Law Class

Abstract

Yet just just how borrowers react to such laws stays mainly unknown. Drawing on both administrative and study information, we exploit variation in payday-lending regulations to examine the result of pay day loan limitations on customer borrowing. We discover that although such policies work well at reducing lending that is payday customers react by shifting with other types of high-interest credit (as an example, pawnshop loans) instead of old-fashioned credit instruments (as an example, charge cards). Continue reading