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Do state regulations affect payday lender concentration?

Author

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  • Barth, James R.
  • Hilliard, Jitka
  • Jahera, John S.
  • Sun, Yanfei

Abstract

Ten states and the District of Columbia prohibit payday loan stores, and thirty-one other states have imposed regulatory restraints on their operations, ranging from limits on fees and loan amounts to the number of rollovers and renewals allowed a borrower. Given the importance of payday lenders to significant segments of the population and the wide variation among state regulatory regimes, our paper examines the extent to which the concentration of payday lenders in counties throughout the country is related to the regulatory environment as well as to various financial and demographic factors. The analysis is based on a unique dataset that has been obtained directly from each state's appropriate regulatory authority.

Suggested Citation

  • Barth, James R. & Hilliard, Jitka & Jahera, John S. & Sun, Yanfei, 2016. "Do state regulations affect payday lender concentration?," Journal of Economics and Business, Elsevier, vol. 84(C), pages 14-29.
  • Handle: RePEc:eee:jebusi:v:84:y:2016:i:c:p:14-29
    DOI: 10.1016/j.jeconbus.2015.08.001
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    References listed on IDEAS

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    1. Brian T. Melzer, 2011. "The Real Costs of Credit Access: Evidence from the Payday Lending Market," The Quarterly Journal of Economics, Oxford University Press, vol. 126(1), pages 517-555.
    2. Bhutta, Neil, 2014. "Payday loans and consumer financial health," Journal of Banking & Finance, Elsevier, vol. 47(C), pages 230-242.
    3. Zinman, Jonathan, 2010. "Restricting consumer credit access: Household survey evidence on effects around the Oregon rate cap," Journal of Banking & Finance, Elsevier, vol. 34(3), pages 546-556, March.
    4. James Barth & Jitka Hilliard & John Jahera, 2015. "Banks and Payday Lenders: Friends or Foes?," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 21(2), pages 139-153, May.
    5. Marianne Bertrand & Adair Morse, 2011. "Information Disclosure, Cognitive Biases, and Payday Borrowing," Journal of Finance, American Finance Association, vol. 66(6), pages 1865-1893, December.
    6. Morse, Adair, 2011. "Payday lenders: Heroes or villains?," Journal of Financial Economics, Elsevier, vol. 102(1), pages 28-44, October.
    7. Donald P. Morgan & Michael R. Strain & Ihab Seblani, 2012. "How Payday Credit Access Affects Overdrafts and Other Outcomes," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 44, pages 519-531, March.
    8. Michael A. Stegman & Robert Faris, 2003. "Payday Lending: A Business Model that Encourages Chronic Borrowing," Economic Development Quarterly, , vol. 17(1), pages 8-32, February.
    9. repec:kap:iaecre:v:21:y:2015:i:2:p:139-153 is not listed on IDEAS
    10. Michael A. Stegman, 2007. "Payday Lending," Journal of Economic Perspectives, American Economic Association, vol. 21(1), pages 169-190, Winter.
    11. Scott Carrell & Jonathan Zinman, 2014. "In Harm's Way? Payday Loan Access and Military Personnel Performance," Review of Financial Studies, Society for Financial Studies, vol. 27(9), pages 2805-2840.
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    1. repec:bla:jconsa:v:51:y:2017:i:2:p:355-379 is not listed on IDEAS

    More about this item

    Keywords

    Payday lending; Small loans; Credit issues;

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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