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dc.contributor.authorMorgan, Donald P.en_US
dc.date.accessioned2012-08-17T14:28:33Z-
dc.date.available2012-08-17T14:28:33Z-
dc.date.issued2007en_US
dc.identifier.urihttp://hdl.handle.net/10419/60671-
dc.description.abstractWe define predatory lending as a welfare-reducing provision of credit. Using a textbook model, we show that lenders profit if they can tempt households into “debt traps,” that is, overborrowing and delinquency. We then test whether payday lending fits our definition of predatory. 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. On that point, we find somewhat lower payday prices in cities with more payday stores per capita, consistent with the hypothesis that competition limits payday loan prices.en_US
dc.language.isoengen_US
dc.publisherFederal Reserve Bank of New York New York, NYen_US
dc.relation.ispartofseriesStaff Report, Federal Reserve Bank of New York 273en_US
dc.subject.jelG18en_US
dc.subject.jelG21en_US
dc.subject.jelD14en_US
dc.subject.jelD18en_US
dc.subject.jelD82en_US
dc.subject.ddc330en_US
dc.subject.keywordpredatory, payday, consumeren_US
dc.subject.stwVerbraucherkrediten_US
dc.subject.stwHypotheken_US
dc.subject.stwWucheren_US
dc.subject.stwPrivate Verschuldungen_US
dc.subject.stwTheorieen_US
dc.subject.stwUSAen_US
dc.titleDefining and detecting predatory lendingen_US
dc.typeWorking Paperen_US
dc.identifier.ppn526660597en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen_US
Appears in Collections:Staff Reports, Federal Reserve Bank of New York

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