BuckeyeBlog

The Center for Consumer freedom points out something that is little-noticed in the current debate over payday lending:

If the Center for Responsible Lending, a North Carolina-based banking organization connected to the discredited community organizing group ACORN, is successful in passing Issue 5, the measure will effectively ban 1,600 consumer lending businesses in Ohio and give banks incorporated outside Ohio a monopoly on short-term loans.

Supporters of Issue 5 sell the amendment as pro-consumer regulation, when it is actually a sweetheart deal for one special interest group.

As the rise of payday lending illustrates, consumers have a desire for short-term loans. It makes no sense to be pro-consumer and yet severly restrict the competition in that market. That enriches the few remaining providers of service at the expense of consumers. It’s unfortunate that those opposed to payday lending seem to ignore basic economics.

Tags: payday lending, Regulation

This entry was posted on Friday, October 17th, 2008 at 1:47 pm and is filed under Economic Freedom. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.