Compete with payday lenders. Don’t put them out of business.

Legislators look for ways to make payday loans less profitable all the time. This is bad for the borrower b/c it makes the cost of doing business higher. This cost, ultimately, gets passed on to other borrowers.

In an article titled “Loan program helps ‘unbanked’ climb economic ladder: FDIC program aims to help low-income consumers avoid payday loans“; banks are getting into the small loan business. Consumer groups like this product b/c it helps build credit and is less expensive than a payday loan.

My feeling is that competition is good. Don’t put handcuffs on payday lenders. Compete with them.

You can read the full report on the FDIC small loan pilot program here.

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