The Wrong Kicks on Route 66
Tom Miller, a professor and Jack R. Lee Chair in Financial Institutions and Consumer Finance at Mississippi State University and Todd Zywicki, a University Foundation Professor of Law at George Mason University Antonin Scalia School of Law published a must-read piece in Real Clear Policy yesterday.
The two scholars argue that a 36 percent interest rate cap is not a “speed bump on small dollar loans,” as many supporters argue, but is instead “an abrupt ‘pavement ends’ sign for millions of Americans.”
“A primary function of credit is to smooth consumption. More than a third of households making under $50,000 experience month-to-month spikes and dips in their income,” Miller and Zywicki argue in the piece. “Small-dollar credit products help them deal with unforeseen expenses. The choice for these consumers is between using small-dollar credit products and simply going without.”
January 10th, 2020 by Dan Bucherer