Payday Lenders’ Creative Electoral Tactics
posted by Frank Pasquale
Who’d guess that my worries about the political power of the financial sector and Jaya’s concerns about misleading ballot initiative wording would converge? Easha Anard reports on the trend:
Payday lenders are spending millions of dollars to back ballot initiatives that challenge state restrictions on their cash-advance practices. . . . [In Arizona], Yes on 200 is financed by the local affiliate of the Community Financial Services Association, a national payday-lending group. . . . . [T]he wording of the ballot initiative suggests it would impose further regulation on payday lenders; in fact, it would roll back much tougher rules. Yes on 200 is promoting the initiative with a counterintuitive strategy: spending money on ads that depict payday lenders as unscrupulous. One ad says, “Arizonans agree: Payday lenders who rip off hard-working Americans need to be stopped,” and asks voters to support the ballot initiative.
Now those are people you can trust! No regulation needed for them.
I wonder if Bryan Caplan would consider those who want to regulate payday lending financial illiterates–and approve this “noble lie” as a way of promoting better policy?
October 28, 2008 at 11:35 pm
Posted in: Administrative Law, Consumer Protection Law, Economic Analysis of Law, Law and Inequality
Print This Post
Responses (3)
Clint Says - October 29, 2008 at 2:02 am
To clarify the position of the payday lenders who are supporting the passage of additional (yes, more) regulation on their industry. If an initiative is not passed the laws protecting Arizona residents will expire and those seeking short-term loans will likely turn to unregulated lenders who operate offshore.
Just because some want to remove the option of payday lending from borrowers, doesn’t mean that the elimination of the product will protect consumers from making more costly and less regulated choices. Prop. 200 is good for Arizona consumers.
KCM - October 29, 2008 at 4:14 pm
Forget if you agree with the idea of pday loans or not- FOCUS on the fact that the Ohio General Assembly thinks they have the right to control what financial products are available to the citizens of Ohio. Big brother style.
Forget if you have used a PD loan or not– FOCUS on the fact that other consenting adults do and are capable of making their own decisions, based on their individiual situations. Who are we to say no, you can’t use that credit card? Or no you can’t use that bank?
Forget everything else — FOCUS on the fact that eliminating payday loans DOES NOT eliminate the need for short term financial options. I bet 99.9% of the OGA doesn’t have to worry about the day to day necessities the rest of are dealing with. They have insurance, pensions, well paying jobs.
Forget about the Pday loan argument — FOCUS on the controlling and spending of our household money by the state. Considering our current economic situation… I vote for less intrusion!! PLEASE let me manage my own darn $$ since the gov’t has shown they are not responsible, accountable or budget conscious. Ohio>> 60M in debt!!
Forget about the Pday loan side– FOCUS on what else the government is going to decide in the future (under the guise of “paternalism”) that we aren’t capable of handling as adults. Restricting how much can be spent on food? alcohol? cigarettes? housing? gambling? clothes?
FOCUS on the fact that the OGA is intruding on our personal financial decisions… where does it stop?? Why do they think they know better what will work for us than we do? We live it every day!!!
The Issue of 5 is waaaay bigger than PD Loans >> its about Financial Freedom of Choice, which I consider to be a BASIC FUNDAMENTAL RIGHT!
***VOTE NO on ISSUE 5 in Ohio!****
John Sabia - October 30, 2008 at 9:17 am
Agree with comments above. The issue begins with pd loans, but where does it go from there? we need less government, not more.
Leave a Reply