Search Results
Journal Article
Why Texas' Small-Dollar Lending Market Matters
This article, written by Ann Baddour of Texas Appleseed, describes the reasons behind the emergence of the payday lending industry in Texas and how banks and other for-profit and nonprofit organizations are working to create lower-cost options that address the growing frustration among those who advocate against the payday and auto title industry?s lending practices.
Discussion Paper
Do Payday Lenders Target Minorities
Payday lenders make small, short-term loans to millions of households across the country. Though popular with users, the credit is controversial in part because payday lenders are accused of targeting their seemingly high-priced credit at minority households. In this post, we look at whether black and Hispanic households are in fact more likely to use payday credit. We find that, unconditionally, they are, but once we control for financial characteristics?such as past delinquency, debt-to-income ratios, and credit availability, blacks and Hispanics are not significantly more likely than ...
Journal Article
Weighing the Costs of Payday Lending Restrictions
The Dallas Fed talks with Kelly D. Edmiston, a senior economist at the Federal Reserve Bank of Kansas City, about his journal article titled “Could Restrictions on Payday Lending Hurt Consumers?” In the article, Kelly D. Edmiston examines payday lending and provides new empirical evidence on how lending restrictions in the industry affect consumers. His analysis shows that restrictions deny some consumers access to credit, limit the ability to maintain formal credit and force residents to sometimes seek even costlier credit alternatives. n his report, Edmiston cautions policymakers about ...
Working Paper
The Complementary Effects of Financial Education and Payday Lending Regulations on Financial Inclusion
Approximately 5.6 million U.S. households remained unbanked in 2023. We examine the effects of state-mandated high school personal finance coursework on banking outcomes. Because the unbanked population resorts to alternative financial services, such as payday loans, for their financial needs, we also examine the interplay between payday loan regulation and financial education. We find that exposure to personal finance coursework is associated with a lower likelihood of being unbanked and of unbanked adults being uninterested in opening a bank account. This finding holds regardless of whether ...
Working Paper
The Complementary Effects of Financial Education and Payday Lending Regulations on Financial Inclusion
Approximately 5.6 million U.S. households remained unbanked in 2023. We examine the effects of state-mandated high school personal finance coursework on banking outcomes. Because the unbanked population resorts to alternative financial services, such as payday loans, for their financial needs, we also examine the interplay between payday loan regulation and financial education. We find that exposure to personal finance coursework is associated with a lower likelihood of being unbanked and of unbanked adults being uninterested in opening a bank account. This finding holds regardless of whether ...