![handle is hein.journals/hblro6 and id is 1 raw text is:
WWW.PAYDAYLOANS.GOV: A SOLUTION FOR RESTORING PRICE-
COMPETITION TO SHORT-TERM CREDIT LOANS
Eric J. Chang'
I. Introduction
Disclosure has been the primary mechanism for federal credit regulation1 since the
passage of the Truth in Lending Act (TILA) in 1968.2 By mandating lenders to disclose
key terms, TILA attempts to empower borrowers by enabling them to compare different
lenders' rates before choosing one. As a result of this comparison-shopping, lenders, in
theory, price-compete among each other to offer the best rates or terms in order to attract
the business of the borrower.3 Legislators, regulators, and the credit industry have long
favored disclosure-based rules because they are less costly and burdensome than tradi-
tional interest rate caps or other forms of direct regulation.4
T J.D., The George Washington University Law School. B.A., University of California, Los Angeles.
My gratitude to Dean Alan Morrison for his guidance and insight. Thank you to Professors Lesley Fair
and Darren Long for their comments. I would like to acknowledge Jonathan Tse for his editorial
assistance and H. Joshua Kotin Esq. for his comments and mentorship that helped inspire this paper's
thesis. All errors are my own.
1 Thomas A. Durkin & Gregory Elliehausen, Disclosure as a Consumer Protection, in THE IMPACT OF
PUBLIC POLICY ON CONSUMER CREDIT 109, 110 (Thomas A. Durkin & Michael E. Staten, eds., 2002)
([M]andatory disclosure has become the main financial consumer-protection approach.); see also
Griffith L. Garwood, Robert J. Hobbs & Fred H. Miller, Consumer Disclosure in the 1990 , 9 GA. ST. L.
REV. 777, 777 (1993) (discussing the pervasiveness of disclosure in consumer protection law).
2 15 U.S.C. §§ 1601-67 (2012).
' See infra text accompanying notes 38-39.
4 See, e.g., Howard Beales, Richard Craswell, & Steven Salop, Information Remedies for Consumer
Protection, 71 Am. Econ. Rev. 410, 411 (May 1981) (Information strategies tend to be more compatible
with incentives, less rigid, and do not require regulators to compromise diverse consumer preferences to a
single standard.); Christopher L. Peterson, Truth, Understanding, and High-Cost Consumer Credit: The
Historical Context of the Truth in Lending Act, 55 Fla. L. Rev. 807, 881-83 (2003) (Although ... neither
industry nor consumer advocates have been entirely satisfied, the disclosure approach has in general
garnered wide acceptance ... high cost creditors have advocated disclosure rules to deflect legislative](ViewImageLocal?handle=hein.journals/hblro6&div=1&collection=&method=preview&ext=.png&size=3)
What Is HeinOnline?
Contact us for annual subscription options:
Already a HeinOnline Subscriber?
profiles profiles most
Contact us for annual subscription options:
Already a HeinOnline Subscriber?
profiles profiles most
Contact us for annual subscription options:
Already a HeinOnline Subscriber?
profiles profiles most