5 Conclusions

5 Conclusions

Overall, pooled cross-state regressions and within-state regressions examining legislation modifications reveal an amazing quantity of agreement. Both recommend the next conclusions about payday lending legislation: cost caps are strictly binding, size caps have a tendency to be less binding, and prohibitions on simultaneous borrowing may actually have small impact on the quantity lent. Minimal term restrictions affect loan size, but maximum term limitations try not to. Delinquency appears definitely associated with higher cost caps. Rollover prohibitions and periods that are cooling-off also to higher cost caps, seem to lessen the regularity of perform borrowing.

Records on coding by types of legislation

Concentrating on states with law modifications, sc, Virginia, and Washington had been all in a position to dramatically cut their prices of perform borrowing. These modifications had been followed closely by significant upheavals, nevertheless, especially in Virginia and Washington where loan volume dropped sharply and, within the instance of Virginia, delinquency spiked and customer composition shifted. It appears most likely that Virginia’s modifications had been linked to its use of the 2-pay-period term that is minimum that will be more compared to the minimum term on most states. It’s going to be interesting to follow along with what are the results in Mississippi, which like Virginia recently adopted a lengthy term limit that is minimum. Continue reading “5 Conclusions”