Google, a leading global search engine, today announced that it would no longer accept advertising for payday loans. Terming the development as an ‘update to its financial services policy', the decision will end many of its prominent online ads. Until now, these ads appeared even in states that have banned payday lending's triple-digit interest rates.
Google's action also precedes a long-awaited regulation from the Consumer Financial Protection Bureau (CFPB) as to how small-dollar lending will operate in the marketplace.
In response, Keith Corbett, Center for Responsible Lending executive vice president, stated:
I think this action is as unprecedented as it is significant. By example, Google is demonstrating how profitable enterprises can also be ethical and supportive of financial fairness. There is nothing fair about triple-digit interest rates being charged on loans to working families. Payday loan stores reap billions of dollars in interest and fees on a product designed to force borrowers into repeat loans.
Google is to be praised for doing its part to limit use of these abusive loans. This decision is a pivotal development in our continued quest for all financial products and services to be fair and transparent for lenders and consumers alike. By removing ads that lure financially-strapped consumers into unaffordable, long-term and costly debt traps, Google is displaying what corporate citizenship looks like. CRL's hope is that others will soon follow suit.
- May 11 Payday Coalition news release
- Payday Mayday: Visible and Invisible Payday Lending Defaults - The lack of underwriting for payday loans creates economic distress for borrowers from the very first loan.
- Perfect Storm: Payday Lenders Harm Florida Consumers Despite State Law – Floridians paid $2.5 billion in fees over a decade despite enactment of a state law, with senior citizens and consumers of color the most likely to become borrowers caught in debt-trap lending.
- Ending the Cycle of Evasion: Effective State and Federal Payday Lending Enforcement - Whether made online, in stores or by banks – payday loans are designed to trap individuals in long-term debt.
For more information, or to arrange an interview with a CRL expert, please contact Charlene Crowell at email@example.com or 919.313.8523