Publication Date
Spring 4-2024
School
School of Business
Major
Business: Finance
Disciplines
Finance and Financial Management
Recommended Citation
Loos, Don, "Fringe Lending: The Case for a National Minimum Standard" (2024). Senior Honors Theses. 1363.
https://digitalcommons.liberty.edu/honors/1363
Abstract
In the American financial sector, the liberalization of usury laws and legal complexity has allowed for controversial fringe financial products to become widely available. Payday loans, car title loans, and short-term, high-interest installment loans, also referred to as fringe loans, have often been classified as “predatory” and unconscionable. The central question in this controversy is whether increased regulation of fringe loans, or their complete prohibition, is effective to protect consumers from a harmful cycle of debt, or whether regulation will cause more harm than good. Since state legislation is ineffective to limit the negative externalities associated with fringe loans, a federal usury law is arguably necessary to provide a unified standard that limits truly predatory loans while providing for consumer choice as the general rule.
