Google Search to Ban Payday Loan Ads
With the latest rules proposed by Consumer Financial Protection Bureau about the procedures of payday loans, it has become one of the hottest topics of this week. To add even more spark to it, Google dropped the bomb, imposing a global ban on payday loan ads. The ban will be effective from July 13th.
Payday loan lenders have created quite some hype and disagreements among consumers by charging extraordinarily high rates to the borrowers. The loan itself is one of the most convenient and demanded form of cash that people–especially the low-income class of America–acquires very frequently, however due to its certain features and misusage by the borrowers and exploitation by the lenders; it earned the title of the most dangerous loan.
When done wrong, an innocent borrowing can soon spiral down into a debt trap that keeps on tightening its harnesses around the borrower until it becomes absolutely impossible for the borrowers to dig themselves out. When the complaints and unfortunate scenarios began to be too much, Barrack Obama’s administration took the matter seriously, which resulted in a proposed set of rules.
Unexpectedly, the proposal triggered a mixed reaction from a large number of consumers. The loan is a lifeline to 19 million American households and despite its misgivings; it has been a constant support and go-to source for emergencies. One of the most emerging sources of payday loans have been online ventures, they are extremely convenient at the time of utmost emergencies and save the borrowers from making any extra trips to a brick and mortar store.
Google taking the decision, however, was highly unanticipated yet a strong message to the lenders that no matter how big your profits are or how bigger your enterprise is, it is still your responsibility to show an ethical and moral fairness to all your customers. Google will especially target those lenders who keep a small time period for the repayment of the loan along with those who bluntly charge high rates, even higher than 36%. Besides these conditions, the search engine will show ads for the loan but the paid ads that appear at the top of the search and on the right hand side will not appear.
This ban will clearly affect the lenders but it will also affect the consumers who are simply looking for few extra bucks to live peacefully even with their paycheck to paycheck lifestyle. With payday loan ads already outlawed on facebook and with the Google making the ban effective from July, the only source of payday loan ads remaining is yahoo and other search engines like bing.com.
The good news for the borrowers is that they are safe from paying any extra charges for the loan as it is a known fact that online vendors charge rates a lot higher than those charged by a storefront lender. Though it looks like the payday industry is soon going to be a thing of the past, we sure hope–for the sake of poor citizens– that the CFPB takes a stand to save the industry. While they have only put out the regulations to save the citizens, they are inadvertently going to make the very same people suffer through such measures.