Consumer Blog

Several professors have used geo-mapping to link payday lending to an increase in violent crime. Reuters story. Here is the working paper. Here is an excerpt from the report abstract: "Payday lenders have become the banker of choice for many residents of poor and working class neighborhoods in recent years. The substantial costs that customers of these fringe bankers incur have long been documented. Yet there is reason to believe there are broader community costs that all residents pay in those neighborhoods where payday lenders are concentrated. One such cost may be an increase in crime. In a case study of Seattle, Washington, a city that has seen a typical increase in the number of payday lenders, we find that a concentration of payday lending leads to higher violent crime rates, controlling on a range of factors traditionally associated with neighborhood crime."