Finally, an independant and reputable payday loan report.

This is an older post that’s been updated:
“Instead of regulating prices charged on small, short-term loans, the authors argue that increasing competition will drive prices down” says Signe-Mary McKernan and Caroline Ratcliffe. This new report by the Urban Institute finds that if payday advances are eliminated they “could be replaced by alternatives that make families even worse off.”

Now, guess who funded this report? They’re not payday lenders. This study was financed by the Charles Stewart Mott Foundation. I think it took a lot of guts. This foundation is committed to supporting projects that promote a just, equitable and sustainable society, since 1926.

Nobody claims that a payday loan is THE solution, but it can be A solution for some people. This is about choice. This report is saying, don’t get rid of it; lets just get it right.

Just like no one likes negative loan amortizations or $4 gallon of gas. Imagine if the government stopped selling us fuel when the price goes over $4? It’s just not the solution and neither is making payday loans unprofitable or making them go away.

Consumer groups should just face the big, pink elephant in the room. There is a huge credit gap in our financial systems. They need to work to fill it and not eliminate it.

These consumer groups should be empowering peoople, not treating them like children.

Here is the full report. Please send it to your legislators.

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