Publication Date
May 2008Author(s)
Kim R. ManturukResearch conducted in North Carolina show most residents did not miss payday lending after it was de-authorized in the state and that the vast majority (nine out of 10) feel payday lending is bad.
Center researchers testified as interested parties before Ohio legislators, who were considering House Bill 545. The bill would cap annual interest rates for payday loans at 28 percent. Those interest rates typically exceed 300 percent.
Among the findings from research conducted in North Carolina for the N.C. Office of the Commissioner of Banks, North Carolinians did not miss payday lending after it was de-authorized in the state. The vast majority — nearly nine out of 10 — low- and middle-income respondents thought payday lending was a bad thing. This overwhelmingly negative perception was consistent even for households that had experienced a recent financial shortfall.
The study, North Carolina Consumers After Payday Lending: Attitudes and Experiences with Credit Options, examined how low- and moderate-income households managed financial hardships after payday lending ended in North Carolina and their attitudes toward the available options to manage those hardships.
Among households who felt they had been affected by de-authorization, most said they were better off without it. Also, the de-authorization of payday lending did not curtail the availability of credit for working families in the state, and most families were aware of a wide range of options for managing financial shortfalls.