Payday Loan Reform Act Leaves Customers with Bad Alternatives

Professor defends payday loans

University of Kansas

The Payday Loan Reform Act is making its way through Congress, and many have concerns about how it will affect consumers who use payday lenders, online cash advances and other short-term loans.

One such concerned citizen is Robert DeYoung, a finance professor at University of Kansas. He wrote an opinion piece that was published Tuesday in the Wall Street Journal.

Myth busting

In his piece, DeYoung talks about the misconception that payday loan customers are uninformed and that payday lenders take advantage of this. He debunks the conception by citing A January 2009 study by Gregory Elliehausen at George Washington University. DeYoung writes:

The study found that payday borrowers make informed choices. About half of the 1,173 payday borrowers he surveyed considered other credit alternatives — such as bank, credit card, or personal loans — before taking out a payday loan. ... click here to read the rest of the article titled "Payday Loan Reform Act Leaves Customers with Bad Alternatives"