NWPTV: Google Announces It WillStop Allowing Ads For Payday Lenders

The following is an excellent article written by Camila Domonoske on the NWPTV website on May 11, 2016 titled “Google Announces it Will Stop Allowing Ads For Payday Lenders” and I quote:

“Google Announces It Will Stop Allowing Ads For Payday Lenders”

Last Updated by Camila Domonoske on May 11, 2016 at 6:08 pm

If you’re looking for fast cash, feel free to Google it. But if you’re selling fast cash, the search giant might not be the place for you.

Starting this summer, Google will no longer allow payday lenders — companies offering short-term, high-interest loans — to buy advertising on Google ad systems.

The new policy, announced on a Google blog, will kick in July 13. Ads for loans with terms of 60 days or less will be prohibited; in the U.S., ads for any loans charging an APR of 36 percent or higher will also be banned.

The Internet search and online ad powerhouse — which relies on ads for 90 percent of its revenue — currently bans dangerous, counterfeit and offensive items from being advertised, as well as services that “are designed to enable dishonest behavior.”

And out of concerns over predatory lending, Google already restricted where ads for payday loans would be displayed.

But now — like Facebook, the other dominant player in the online ad industry — Google will prohibit these payday loan advertisements.

The news comes as a federal watchdog continues to push for stronger restrictions on payday lending. In 2015, the Consumer Financial Protection Bureau released a draft of proposed rules intended to regulate the industry. (Implementation of the proposed rules has been delayed, and it’s not clear exactly when they’ll be issued.)

As we reported at the time, cash-strapped consumers who take out payday loans can quickly find themselves trapped in a cycle of loan renewals, administrative fees and triple-digit interest rates. A loan for a few hundred dollars can wind up costing thousands.

Online payday lenders — which might be particularly affected by Google’s new policy — present another layer of possible cost for consumers.

Just last month, the CFPB released a report that found online lenders, by directly pulling payments from a consumer’s bank account, can quickly rack up overdraft fees that compound the cost of a payday loan to a consumer.

Then there’s another way in which payday lending online is different from the shop on the corner: Billboards promising fast cash can’t generally be spotted from five states over.

Many states have their own payday lending restrictions. A study last fall found that online advertisements can help payday lenders target consumers in states where payday lending is, in fact, illegal.

Google didn’t mention federal watchdogs or varying state laws in its announcement. The company simply said it’s targeting short-term and high-interest loans because “research has shown that these loans can result in unaffordable payment and high default rates for users.”

The policy affects ads, not search results. (Google ads appear above results, and on sites that partner with Google Adwords.) For instance, while Google bans ads for fireworks, searching for “buy fireworks” readily returns a list of vendors.

But by blocking ads for payday loans, “our hope is that fewer people will be exposed to misleading or harmful products,” Google’s director of global product policy writes.

Advocates have celebrated Google’s new policy. But as The Washington Post reports, officials from the payday loan industry have called the new rules “unfair” and “discriminatory” for not distinguishing between different kinds of payday lenders.

Copyright 2016 NPR. To see more, visit NPR.
(This is long overdue. Payday lenders, which a lot of states don’t even allow, are just exploiting their customers. This is something that Sen Elizabeth Warren, who sits on the Senate Banking Committee, has been warning people about for many years and that’s why she set up the Consumer Financial Protection Bureau which was part of the Dodd-Frank financial Bill.
LaVern Isely, Progressive, Overtaxed, Independent Middle Class Taxpayer and Public Citizen Member and USAF Veteran

About tim074

I'm a retired dairy farmer that was a member of the National Farmer's Organization (NFO). Before going farming, I spent 4 years in the United States Air Force where I saved up enough money to get my down payment to go farming. I also enjoy writing and reading biographies and I write about myself as well as articles and excerpts I find interesting. I'm specifically interested in finances, particularly in the banking industry because if it wasn't for help from my local Community Bank, I never could have started farming which I was successful at. So, I'm real interested in the Small Business Administration and I know they are the ones creating jobs. I have been a member of Common Cause and am now a member of Public Citizen as well as AARP. I have, in the past, written over 150 articles on the Obama Blog (my.barackobama.com) and I'd like to tie these two sites together. I'm also on Twitter, MySpace and Facebook and find these outlets terrifically interesting particularly what many of these people did concerning the uprising in the Arab world. I believe this is a smaller world than we think it is and my goal is to try to bring people together to live in peace because management needs labor like labor needs management. Up to now, that hasn't been so easy to find.
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