A Note on Capping Rates

In Ontario they’re debating about capping rates on payday loans. On the surface this may seem like a good thing, but my opinion is that it disables market forces and will effectively never make price competition a factor.

I’ve felt that most regulation is aimed at making payday loan companies less profitable, when they should really focus on educating consumers.

You can talk about usury, but there is a cost of doing these loans that isn’t profitable when charging double digit interest rates alone.