Interest rate caps make loans less available to subprime borrowers

by Christian Whittle | Mar 8, 2023 | Recent News - Tom Miller

For centuries, rulers and lawmakers have imposed interest rate caps. These caps likely stem from the widely held belief that caps make loans cheaper for necessitous individuals. This belief persists today. But suppose the belief is wrong?   Economic theory...

Honor the Pirate — Give College Athletes More Time to Graduate

by Christian Whittle | Feb 16, 2023 | Recent News - Tom Miller

College football fans were treated to a thrilling end to this year’s college football season, including the exhilarating slugging matches in the semi-finals and Georgia’s decisive win in the championship. But after the hubbub dies down, we cannot ignore the...

Effects of Illinois’ 36% Interest Rate Cap on Small-Dollar Credit Availability and Financial Well-being

by Christian Whittle | Feb 16, 2023 | Recent News - Tom Miller

Economic theory predicts that a binding interest-rate cap decreases credit availability for high-risk borrowers. On March 23, 2021, Illinois imposed an all-in interest-rate cap of 36 percent per annum for loans under $40,000 from non-bank and non-credit-union lenders....

A Close Look at the Recent Study of the Effects of Illinois’ 36% “All-In” Interest Rate Cap on Small-Dollar Credit Availability, with Special Guest Tom Miller, Professor of Finance, Mississippi State University, and Study Co-Author

by Christian Whittle | Feb 16, 2023 | Recent News - Tom Miller

Using data for the last quarter of 2020 and first three quarters of 2021, the study examined the effects of the 36% rate cap imposed by the Illinois Predatory Loan Prevention Act which became effective in March 2021. The study found that the cap significantly...

Comment in Response to Proposed Rule on Payday, Vehicle-Title, and Certain High-Cost Installment Loans

by Christian Whittle | May 14, 2019 | Mercatus Center Publications

We appreciate the opportunity to respond to the Bureau of Consumer Financial Protection’s (Bureau) proposed rule governing payday, vehicle-title, and certain high-cost installment loans. The Mercatus Center at George Mason University is dedicated to bridging the gap...