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Consumer Borrowing after Cash Advance Bans

Consumer Borrowing after Cash Advance Bans

Federal Reserve Board

Stanford Law Class

Abstract

High-interest payday loans have actually proliferated in modern times; therefore too have efforts to manage them. Yet just just how borrowers answer regulations that are such mostly unknown. Drawing on both administrative and study information, we exploit variation in payday-lending regulations to examine the end result of pay day loan limitations on customer borrowing. We realize that although such policies work well at reducing payday financing, customers react by moving to many other types of high-interest credit (as an example, pawnshop loans) as opposed to conventional credit instruments (for instance, bank cards). Continue reading Consumer Borrowing after Cash Advance Bans