Google’s Wrong to Ban Payday Loan Ads

May 12, 2016 at 9:42 am 4 comments

It’s a lot easier to support free speech when you only support the free speech you agree with. So I am sure that Google’s announcement that it will ban advertisements for payday loans starting on July 13 will win kneejerk plaudits from all the usual suspects and high praise for its “corporate responsibility.” That’s too bad. Here’s why.

First, defining a payday loan isn’t as easy as Google thinks it is. Just ask the CFPB which is still tinkering with its payday loan regulations.  In its blog announcing the advertising ban, Google said it would apply to loans where repayment is due within 60 days of the date of issue or to loans with an APR of 36% or higher. Credit union payday alternative loans can require repayment within a month and, depending on how the APR is calculated, Google’s criteria could include loans provided by credit unions.  As researchers at the New York Fed argued “36 percenters” may want to reconsider their position, unless of course their goal is to eliminate payday loans altogether.”

Personally, I can’t stand these products and I would love to live in a world where there wasn’t a demand for them. But, there has always been and there will always be people in desperate need of cash.  With its usury cap, payday loans are ostensibly banned in New York; but, New Yorkers get them every day.   One of the reasons why Municipal Credit Union in New York City is one of the oldest credit unions in the country is because loan sharking was so rampant in the early 1900’s that people demanded a safe alternative. And it isn’t just the poor anymore.  Approximately half of American households live paycheck to paycheck. Banning payday loan advertisements isn’t going to change that. Payday loans are a symptom of economic disparity and finding a cure is much more challenging than pretending that there isn’t a need for these loans.

Finally, there are issues here that are much more important than payday loans. I don’t want Google using its power to determine which products are worthy of being in the marketplace and what products are not. There would be a justifiable uproar this morning if Google announced that it was banning ads for birth control pills, for example, or no longer accepting advertisements for marijuana stores in states where they are legal;  but you won’t hear an uproar this morning because  payday loans are politically incorrect. The problem is that Big Brother is just as dangerous to free speech as a private sector behemoth  than as a Government censor.

But, increasingly, Americans are only supportive of the free exchange of ideas that they agree with. This is not just unfortunate, it’s dangerous.



Entry filed under: Economy, General. Tags: , .

When a Member Surrenders Her Home Does It Belong To the Credit Union? Do You Know Who Your Beneficial Owner Is?

4 Comments Add your own

  • 1. Michael Murrock  |  May 12, 2016 at 1:18 pm

    If Google’s advertising decisions do not violate any law or regulation, why should (this particular) decision matter? I’m not aware that any “publisher” is required to accept everything for publication. Isn’t that why they employ editors? Anyone who chooses to rely on one source for their information – be it educational or purchasing decisions – is… not very wise. I applaud them for being upfront about their policy. I see this as “This is not the droid you are looking for” – in other words, if you’re looking for this type of product, look elsewhere.

    • 2. Henry Meier  |  May 12, 2016 at 3:02 pm

      Mike- Google’s power to block access to information is unprecedented, If we don’t start applying some of the same standards to the private sector that we traditionally have applied to the government free expression will be meaningless.

      • 3. Michael Murrock  |  May 12, 2016 at 3:11 pm

        Due to existing government intrusion, “free expression” is already meaningless… Government already intrudes far too much in our lives,..

  • 4. Richard Wagner  |  May 13, 2016 at 12:29 pm

    Payday lenders are the modern name for loan sharks of the past. When Mayor Mitchel directed the City’s Chamberlain to find a solution to city employee harassment, he came up with credit unions, No one at that time had a CU, but legislation had been passed allowing them to exist. What CUs offer is a way to structure your financial affairs in a logical way, with share drafts, bill paying on line,savings clubs for holidays & vacations, none of which are offered by the pay day lender. When I opened my MCU account I started on my way to financial security, we in the Credit Union Movement are giving people a way to a better future.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

Trackback this post  |  Subscribe to the comments via RSS Feed

Authored By:

Henry Meier, Esq., General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association.

Enter your email address to subscribe to this blog and receive notifications of new posts by email.

Join 503 other followers