All American Payday Loans

Judge Rejects City's Payday Lender Rules

The Ohio House has overwhelmingly passed long-awaited payday loan legislation meant to close loopholes those lenders use to charge high interest rates. Payday loans regularly hit the national press as people tally up horrendous debt and get themselves into a debt crisis through borrowing irresponsibly with payday lenders who take advantage of people who find themselves in a vulnerable situation. While payday loans have, as of January 2015, been capped, you could still end up paying a payday lender back double the sum that you initially borrowed.

Our RD approach exploits these discontinuities in the likelihood of treatment. The firm data provide a very large number of observations across the credit score distribution both within and across firms. This provides a sufficiently large number of observations close to firm lending thresholds. While consumers can generally improve their credit scores through timely credit repayment and building up a history of credit usage, consumers do not have sufficient information to precisely manipulate their scores around lender thresholds, a key assumption for identification.

Lenders make solid returns on long-term loans thanks to the interest rates they charge. Every time you send your lender a monthly payment, a large chunk of your dollars will go toward interest rather than principal. Mortgage lenders, for instance, make a sizable amount of money thanks to interest. That's because they're lending hundreds of thousands of dollars to their borrowers. With such a large sum of money stretched out over 30 years, even a relatively modest interest rate of five percent can generate a significant amount of money for lenders.