Summary of For Better and for Worse?

Effects of Access to High-Cost Consumer Credit

Federal Reserve Board,

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For Better and for Worse? summary
US states have passed various laws to tackle payday lending, but such loans could be beneficial.


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Debt is an important aspect of American life, but economic theory diverges on the consequences of credit access to human well-being. Economist Christine Dobridge specifically looks at the impact of payday loans – small, short-term, high-interest loans – on US households in this brief but informative study. Should these loans, which some critics consider predatory lending, face stringent regulation or prohibition? Or do they actually serve a useful purpose that justifies allowing people access to them? getAbstract recommends this astute report to policy makers and financial services professionals for its insights into the payday lending market.

In this summary, you will learn

  • How payday lending works,
  • How it affects the financial well-being of borrowers and
  • Whether regulators’ concerns about payday loans are justified.


Consumers in the United States tend to rack up huge amounts of debt. In 2013, fully three-quarters of US households used some form of credit, owing a total of $13.8 trillion. Servicing that debt takes up a good part of a household’s income – a median 16%. This high debt usage has invited criticism, ...
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About the Author

Christine L. Dobridge is an economist with the Federal Reserve System.

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