A Corporate Social Responsibility Analysis of Payday Lending
33 Pages Posted: 29 Sep 2017
Date Written: May 2017
We conclude based on our analysis that the payday loan industry appears to be, at present, an example of what Schwartz and Carroll (2003, pp. 513-514) label as an “economic/legal” industry, as it appears to focus only on maximizing profit and shareholder value while sometimes falling within the legal domain but clearly outside the ethical domain. Our CSR assessment and the evidence we present supports the case for additional government regulation. Another more extreme public policy alternative is to ban payday lending altogether, which as indicated has already been enacted across several jurisdictions. The evidence provided above provides considerable support for a ban, given the current lack of appropriate CSR practices of the industry and the apparent absence of proper self-regulation.
Keywords: Payday Lending, Alternative Financial Services, Fringe Banks, CSR
JEL Classification: G18, M50
Suggested Citation: Suggested Citation