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Regulation And The Payday Lending Industry

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  • Stefanie R. Ramirez

Abstract

Using a unique, multistate data set and exploiting policy heterogeneity across states and time, I examine average and marginal effects of changing payday‐lending policies on county‐month‐level branch counts between January 2001 and December 2010. Average results on operating branches are mixed: the effects of adopting liquidity requirements and fee ceilings are negative while the effects of adopting balance and rollover limits are positive. Adopting balance limits decreases new branch counts. Marginal effects of relaxing rollover ceilings are positive for operating branches, though negative for new branches. Results highlight the need to consider both consumer‐ and producer‐interest perspectives when examining the relationship between industry and regulation. (JEL L22, G28, D22)

Suggested Citation

  • Stefanie R. Ramirez, 2020. "Regulation And The Payday Lending Industry," Contemporary Economic Policy, Western Economic Association International, vol. 38(4), pages 675-693, October.
    • Handle: RePEc:bla:coecpo:v:38:y:2020:i:4:p:675-693
    DOI: 10.1111/coep.12469
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Mohammed El Hazzouri & Rowan El‐Bialy & Ela Veresiu & Kelley J. Main, 2023. "Vulnerable consumer experiences of (dis)empowerment with consumer protection regulations," Journal of Consumer Affairs, Wiley Blackwell, vol. 57(3), pages 1066-1088, July.
    2. Megan Doherty Bea & K. Bley, 2022. "(Un)conditional consumer protections in high‐cost lending regulation: Impacts on local lending geographies," Journal of Consumer Affairs, Wiley Blackwell, vol. 56(4), pages 1561-1596, December.
    3. Megan Doherty Bea, 2024. "A Life Course Perspective of Community (Non)Investment: Historical Financial Service Trajectories and Community Outcomes," Journal of Family and Economic Issues, Springer, vol. 45(2), pages 288-307, June.
    4. Yidi Liu & Xin Li & Zhiqiang (Eric) Zheng, 2024. "Consequences of China’s 2018 Online Lending Regulation and the Promise of PolicyTech," Information Systems Research, INFORMS, vol. 35(3), pages 1235-1256, September.
    5. Megan Doherty Bea, 2023. "Relational foundations of an unequal consumer credit market: Symbiotic ties between banks and payday lenders," Journal of Consumer Affairs, Wiley Blackwell, vol. 57(1), pages 320-345, January.
    6. Craig Wesley Carpenter & Kristopher Deming & John Anders & Michael Lotspeich‐Yadao & Charles M. Tolbert & Adam Ingrao, 2024. "Do payday lending bans protect or constrain regional economies? Evidence from the Military Lending Act's final rule," Contemporary Economic Policy, Western Economic Association International, vol. 42(2), pages 319-335, April.
    7. repec:bcp:journl:v:9:y:2025:i:12:p:2536-2544 is not listed on IDEAS

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    More about this item

    JEL classification:

    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis

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