Are Payday Lending Markets Competitive?

8 Pages Posted: 1 Oct 2012

See all articles by Victor Stango

Victor Stango

UC Davis Graduate School of Management

Date Written: October 1, 2012


The rapid and widespread growth of the payday loan market has sparked considerable controversy, in part regarding the “high” prices charged for these loans. This article presents several new pieces of evidence addressing this issue. Specifically, it finds that credit unions — who frequently are payday lenders’ sharpest critics — do not (and apparently cannot) offer functionally identical products at lower prices. It concludes that the claim that other lenders can serve this market at lower prices does not seem justified.

Suggested Citation

Stango, Victor, Are Payday Lending Markets Competitive? (October 1, 2012). Regulation, p. 26, Fall 2012, Available at SSRN:

Victor Stango (Contact Author)

UC Davis Graduate School of Management ( email )

One Shields Avenue
Davis, CA 95616
United States

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