2 New Studies Praise Merits of PDL Products
Published: Wed, 02/11/15
Two new payday loan academic studies released regarding the
merits of payday loan/small dollar credit products.
Read them in their entirety here:
http://paydayloanindustryblog.com/?p=3094
1) A Columbia Law School Professor, Ronald Mann, released a study
entitled, "Do Defaults on Payday Loans Matter?" Professor Mann
compared the credit score change over time of borrowers who default
on payday loans to the credit score change over the same period of
those who do not default.
Professor Mann's findings "suggest that default on a payday loan
plays at most a small part in the overall timeline of the
borrower's financial distress." He further states that the small
size of the effect of default "is difficult to reconcile with the
idea that any substantial improvement to borrower welfare would
come from the imposition of an "ability-to-repay" requirement in
payday loan underwriting."
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2)Kennesaw State University Professor of statistics and data
science, Jebnnifer Lewsi Priestly, released a second study
entitled, "Payday Loan Rollovers and Consumer Welfare." Professor
Priestley evaluated the effects of sustained use of payday loans.
She concluded that borrowers having a higher number of rollovers
experienced more positive changes in their credit scores than
borrowers with fewer rollovers. She observes that such results
"provide evidence for the proposition that borrowers who face fewer
restrictions on sustained use have better financial outcomes,
defined as increases in credit scores." [My dear readers, this is
HUGE!]
According to Professor Priestley, "not only did sustained usage not
contribute to a negative outcome, it contributed to a positive
outcome for borrowers."
Read more:
http://paydayloanindustryblog.com/two-new-payday-loan-studies-reveal-merits/
Thoughts? Reach out to Jer@TrihouseConsulting.com