Cash advance loan providers don't take into account race

You will find claims that cash loan advance lenders purposefully exploit minorities. The idea is that short term installment loan lenders go places to exploit impoverished minorities. That is not the case at all. A payday loan store, just like a Bavarian Motor Works dealership, goes exactly where demand is highest. Anybody would be hard pressed to discover a business which does not work that way.

Money advance stores group together

One allegation made towards payday lending is that payday lenders focus on certain races. They move to areas exactly where that race is targeted. The Center for Responsible Lending released a record that purported payday lenders in California clustered in areas in which predominantly African Americans and Latinos were located. Check cashing is accessible in most of these areas. They’re just places financial services tend to be available. A study had been done in 2009 by Robin Prager that showed that areas that had a population mostly under 40, had been urban and rural, and lived around the poverty level were the typical areas payday loan providers would set up shop. Lending to those who can’t afford to pay back the loan is a bad business strategy. That’s why payday loan companies don’t do that.

Supplying areas happened with desire

To argue that a business locating where there is demand for their services is predatory simply because of the demographics of the area is patently ridiculous. If that had been the standard, marketing to any demographic besides everyone is predatory. This has proven that targeting a minority is considered predatory because you’re giving them what they desperately need. That means the clothing business that offers heavy coats that can withstand temperatures as low as negative 80 degrees is being predatory in Alaska because it isn’t also offered to those in Arizona.

This is shown with economics

Correlations do not necessarily end in trigger and effect relationships. That makes sense. Personal loan companies cannot lend to those who can’t pay the cash back. This would end in a loss of money instead of a profit and also the shops would close. The companies would all die off fast if this were the case. You can find numerous more facts and statistics reports.