Payday Lending Regulation and Borrower Vulnerability in the United Kingdom and Australia
Journal of Business Law, 2015, Issue No. 3, pp. 223-255
35 Pages Posted: 23 Apr 2015
Date Written: April 21, 2015
The current debate in the United Kingdom about the appropriate regulatory response to payday lending involves the key issue of borrower vulnerability. There is compelling evidence in the UK that many payday lenders are deliberately making loans to financially vulnerable borrowers who cannot afford those loans. This article examines the evidence for borrower vulnerability in the UK and Australia and the regulatory responses in those two countries to payday lending. Payday loans in Australia are the same as those that are available in the UK and the concerns that are now being raised in the UK about payday lending formed the basis for recent regulatory intervention in Australia. This article also contains an empirical study of the location of payday lending businesses in Australia. We investigate whether payday lenders are more likely to locate their business operations in areas where larger groups of financially vulnerable people are living.
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