Let’s put this to rest
January 21, 2009 | alternatives, industry, industry critics, positive media coverage, research | Comments (0)A brilliant new study says payday loans do not cause bankruptcy. Here’s the news release:
According to Dr. Stoianovici, he and Prof. Maloney studied the effects of payday-lending legislation and of the numbers of payday-loan stores in early years on personal bankruptcy filing rates in subsequent years. Their study used two different analytical techniques, neither of which found any relationship between payday lending and bankruptcy rates. One of the techniques, called Granger causality testing, is specifically designed to test whether one phenomenon can be said to cause another occurring in a later period.The findings of the study are consistent with those of other investigators — including Dr. Donald P. Morgan of the Federal Reserve Bank of New York and Prof. Jonathan Zinman of Dartmouth College — that access to high-interest-rate consumer credit correlates with improved household financial condition.
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