Prohibitions, Price Caps, and Disclosures

Prohibitions, Price Caps, and Disclosures

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This study uses new nationally representative data from the National Financial Capability State-by-State Survey to examine the relationship between state-level alternative financial service (AFS) policies (prohibitions, price caps, disclosures) and consumer use of five AFS products: payday loans, auto title loans, pawn broker loans, refund anticipation loans, and rent-to-own transactions. The results suggest that more stringent price caps and prohibitions are associated with lower product use and do not support the hypothesis that prohibitions and price caps on one AFS product lead consumers to use other AFS products. Charts and tables. This is a print on demand edition of an important, hard-to-find publication.Specifically, we find prohibiting payday loans is associated with a 35 percent decline in the use of these loans. Further, we find ... Moving from no APR cap on auto title loans to an APR cap of 36 percent is associated with a 30 percent decline in auto title borrowing. ... REFERENCES Anderson, M. H., and R. Jackson. 2004.

Title:Prohibitions, Price Caps, and Disclosures
Author:Signe-Mary McKernan
Publisher:DIANE Publishing - 2011-06-01


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