24 March 2008

Common Sense Consumer Protection in Arkansas

Arkansas Attorney General Dustin McDaniel is saying that two recent State Supreme Court decisions mean that payday lenders can be prosecuted under the Arkansas Deceptive Trade Practices Act.

No offense to any reader of mine from Arkansas, and a quick look at the statistics reveals that number over the past 8 months to be 27, but this is the one of the last places that I would expect this.

I do understand that Arkansas is less corrupt than Louisiana, more populist than Texas, and less backward than Mississippi, but I find this to be a very surprising development.

While Arkansas does have a a bit of a tradition of populism, I think that this more important than simply short term politics.

There is an increasingly strong view, society wide, that deregulation of financial markets, from the very small (Payday Lenders), to the very large (Wall Street) have failed.

People realize that in the real world, there are situational and informational asymmetries that require that the government take action to prevent predators from preying on the weak.

Took them long enough.


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