A Lesson from Predatory Lenders: The Market Does Not Regulate Itself

Before the national change of mind and the ensuing congressional turn-over last year, "Payday Loan Operations" acted as loan sharks with impunity, taking advantage of people's hard luck and charging them 400% interest on short-term loans. NPR reports that now that legislators are moving to regulate the industry, these predators have gone 180°, offering their clients 2 to 4 month grace periods to pay off their loans at no interest. Not only does that demonstrate that market was not designed to regulate itself, but it shows that the external pressure of consumer protection regulations have a reforming effect on the market.