Ethnic background isn't one factor in a cash advance

You will find lots of says made about the money advance industry. One of them is that loan providers exploit customers along racial lines. The poor individuals of non-Caucasian origin are exploited by hateful short term loan lenders, or so goes the idea. That is not the case at all. A cash advance store, just like a BMW dealership, goes where desire is highest. A business which doesn’t follow simple desire is a hard one to discover.

Finding the cluster of cash advance shops

Numerous individuals think that payday loan companies all move into areas to target certain races with their goods. The Center for Responsible Lending released a record that purported payday loan providers in California clustered in areas in which predominantly African Americans and Latinos were located. These areas actually had lots of financial services accessible in them like check cashing. Payday lenders really focus on areas that are urban or rural, have a population younger than 40 mostly and live at the poverty line. This was proven in a study in 2009 done by Robin Prager. Payday loan companies would end up losing their business if they only lent to those who cannot repay the loan later.

Area of supply is based on the desire

To argue that a business locating where there is demand for their services is predatory simply because of the demographics of the area is patently ridiculous. If that had been the standard, marketing to any demographic besides everyone is predatory. This has shown that targeting a minority is considered predatory because you are giving them what they desperately need. That means the clothing company that offers heavy coats that can withstand temperatures as low as negative 80 degrees is being predatory in Alaska because it isn’t also offered to those in Arizona.

Economics can fix this

Correlations don’t necessarily end in cause and effect relationships. That makes sense. Personal loan companies cannot lend to those who cannot pay the cash back. This would end in a loss of money instead of a profit and the shops would close. If they did, the industry would be out of business easily. You are able to discover many more facts and statistics reports.