Failed Markets, Failing Government, or Both? Learning from the Unintended Consequences of Utah Consumer Credit Law of Vulnerable Debtors

Peterson, Christopher L.

doi:10.2139/ssrn.1499447

Cited by 2 publications

(1 citation statement)

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“…The article appeared in the Utah Law Review and was built around three objectives: (1) document a problem, (2) explain why market forces alone would not solve it, and (3) recommend policy responses. 89 The 2001 article took aim at the impact of multiple types of high-cost credit, but payday lenders (what Peterson called "post-dated-check lenders") received the most attention. Peterson reported the results of two empirical studies of the Utah high-cost credit market.…”

Section: Policy Entrepreneurshipmentioning

confidence: 99%

The Power of Community Action: Anti-Payday Loan Ordinances in Three Metropolitan Areas

Mayer

Martin

2017

SSRN Journal

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Local ordinances that restrict payday lending constitute an important strategy in the overall attack on this problematic form of lending. In this report, made possible by the generous support of Silicon Valley Community Foundation, we describe and analyze campaigns in three locales that differ markedly in the opportunities and challenges faced by ordinance advocates. The locales are Santa Clara and San Mateo counties in California ("Silicon Valley"); Dallas, Denton, and Tarrant counties in Texas; and Salt Lake County in Utah. This report finds both commonalities and important variations among these campaigns. While there is no single recipe for a successful ordinance campaign, our comparative analysis suggests the following ten lessons for payday lending opponents and other advocates of social reform via local action. The lessons, in brief, are as follows: Lesson #1: Form a strong broad-based coalition and develop rules for its operation. Lesson #2: Move beyond abstractions like "500% interest" or "debt traps" and gather stories from actual borrowers about the effects of these loans on their lives. Seek the help of social service providers who are part of your coalition in gathering these stories and empowering borrowers to share them at public hearings. Lesson #3: Seek financial support for campaigns if you can, but never assume that ample financial resources are necessary for a successful campaign. Lesson #4: Involve faith leaders in a meaningful and ongoing way early in any campaign. Lesson #5: Cultivate strong working relationships with the press and create a detailed strategy for working effectively and consistently with members of the local media. Lesson #6: Identify and cultivate a member of the city council (or county board of supervisors) who will serve as your campaign's inside champion. In some instances, more than one potential champion may be necessary when sensitive politics or rivalries make the choice of a single champion problematic. Lesson #7: Identify and schedule meetings with city decision makers well in advance of any key votes. Be prepared in these meetings to present strong arguments in favor of any ordinance. These arguments will depend on local politics. Under some conditions, the negative impact on borrowers will be most persuasive; in others, the impact of payday lending on local economies, crime, blight, and the general image of a particular city will the city will be most effective.

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Section: Policy Entrepreneurshipmentioning

confidence: 99%