Defining and Detecting Predatory Lending
Donald P. Morgan of the Federal Reserve Bank of New York has published a staff report titled "Defining and Detecting Predatory Lending" (PDF). From the abstract: "We find that in states with higher payday loan limits, less educated households and households with uncertain income are less likely to be denied credit, but are not more likely to miss a debt payment. Absent higher delinquency, the extra credit from payday lenders does not fit our definition of predatory. Nevertheless, it is expensive."
I was curious to get your thoughts on that report, as it stacks up to the congressional hearing for the credit card companies on their fee structure. At a cursory glance, it doesn't look like it'd be a good time to be in the business of making sub-prime loans.
Posted by: Joe | January 26, 2007 at 09:54 AM