Various news outlets reported that the payday loan industry may be breathing its last few breaths shortly before new regulations for the industry went into effect. They made such bold predictions as that there would be greatly increased prices, illegal lenders, and decreased eligibility for consumers. Many of these prognostications are quickly being disproved as the payday loan industry continues to thrive.
The Telegraph proclaimed that new regulations would see many payday loan companies go under, which would lead to decreased competition and ultimately higher costs for consumers. While this was partly true, it has mostly turned into a positive instead of the doomsday prediction it was made to be.
Many payday loan companies did fold once the new regulations were put into effect. But most of those were companies that were operating irresponsibly and lending at exorbitant prices. Their departure from the industry is not missed, and it has paved the way for the remaining lending companies to fill in the voids. But those companies have not done so by raising their prices- quite the opposite, in fact.
Instead, prices have decreased as increased visibility for some of the less than reputable practices of the payday loan industry has made it necessary for the honest companies to offer incentives to draw in new and previous customers. They have slashed their prices and made it easier for consumers to pay back their loans in an effort to put a good public face on their industry. This has paid off well, as consumers are now more positive about the industry than ever before.
Consumer agencies note that complaints about the payday loan industry have fallen by about half. Consumers see the payday loan companies that remain in a very positive light, and this has made for a healthier, vivacious industry.
Illegal lenders are also on the decline, as it is obvious that those payday loan companies engaging in illegal and toxic practices are being chased from the market. Tighter regulation has actually caused greater openness and honesty in the payday loan business, and it is most evident by the sheer number of companies leaving the industry behind. They cannot remain in the market because of the way their businesses have to be run, but the honest payday loan companies are still holding strong and many are doing better than ever in the wake of decreased competition.
This does offer reduced consumer choice, but it is obvious that the choices that remain are better for the consumers than the wide variety of crooks and thugs who once tarnished the industry.