With the economy in shambles, everyone seems to be strapped for cash. The recession has affected all Americans, so it is a wonder that people living in the northeast are half as likely to take out a payday loan as the rest of the country. Only 3% of north-easterners have taken out such a loan, while the rest of the country has a rate of about 6-7%. Although this may seem quizzical, there are several factors that may be responsible for these statistics.
The first and most important reason that people in the Middle Atlantic and New England regions of America are less likely to take out a payday loan is the law regarding such loans in this area. Of the thirteen states where these businesses are illegal or severely limited, seven are in the northeast. This is a significant portion of the nine states that compromise this region. It is no wonder that the numbers are what they are, as these services are illegal in over 75% of the area. However, this may not be the only contributing factor. Even in states where payday loan offices are illegal, people are usually able to bypass these laws by opting for an online transaction instead, which are often subject only to federal regulations rather than state restrictions. Thus, there are likely other determinants that also play a role in these statistics.Read more »