by Jeff Sovern
So says a study from the Glassgow Centre for Population Health, Public Health Implications of Payday Lending. The study's "key messages:"
• Payday lending is a contemporary public health concern: the vulnerability of the populations involved, the urgency, scale and growth of the issue coupled with the corrosive nature of personal debt and financial vulnerability to mental and physical health are key factors in this.
• Provision of viable alternatives to payday lending is a societal policy priority requiring immediate attention: the demand for rapid, easy access and short-term credit among low-income households is not currently met by mainstream banking, credit unions, microcredit or employer lending, nor do the 2014 Financial Conduct Authority regulatory reforms address these demands; indeed the reforms may exacerbate demand for some borrowers.
• It is limiting to focus entirely on the monetary consequences of debt and payday lending: alongside populations experiencing chronic debt, payday borrowers should have access to a range of sustained and person-centred services and support. To help manage their debt and mitigate the damaging effects to health and wellbeing, longer-term support should involve access to training, continued education and career advice.
• Greater transparency is required within the payday lending industry: it would help services and support for payday borrowers if there were a clearer and timelier profile of borrower demographics and patterns of borrowing.
A digression: when I was a boy, before cable television, I remember going to movie theaters which asked moviegoers to sign petitions against "pay TV." I had the impression that many people signed the petitions. I wonder how many of them would give up their cable and sign such petitions today. In any event, some payday lenders seem to be employing a similar strategy and are encouraging customers to post to the CFPB's "Tell Your Story" portal. The result can be read in the Washington Examiner story, Payday lenders tout overwhelmingly positive feedback. Excerpt:
Of 12,546 comments on payday lending posted through the bureau's "Tell Your Story" portal, 12,308 reflected positively on the industry, according to the Community Financial Services Association of America, an industry group for payday lenders.