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Volumn 2009, Issue 2, 2009, Pages 403-456

Testing the substitution hypothesis: Would credit card regulations force low-income borrowers into less desirable lending alternatives?

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EID: 65349114965     PISSN: 02769948     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Review
Times cited : (18)

References (358)
  • 1
    • 84868929627 scopus 로고    scopus 로고
    • American households now hold an average of approximately $9,300 worth of credit card debt. Examining the Billing, Marketing, and Disclosure Practices of the Credit Card Industry, and Their Impact on Consumers: Hearing Before the S. Comm. on Banking, Housing, and Urban Affairs, 110th Cong. (2007) (statement of Sen. Christopher Dodd, Chairman, S. Comm. on Banking, Housing, and Urban Affairs), available at http://dodd.senate.gov/index. php?q=node/3718/print.
    • American households now hold an average of approximately $9,300 worth of credit card debt. Examining the Billing, Marketing, and Disclosure Practices of the Credit Card Industry, and Their Impact on Consumers: Hearing Before the S. Comm. on Banking, Housing, and Urban Affairs, 110th Cong. (2007) (statement of Sen. Christopher Dodd, Chairman, S. Comm. on Banking, Housing, and Urban Affairs), available at http://dodd.senate.gov/index. php?q=node/3718/print.
  • 2
    • 65349099950 scopus 로고    scopus 로고
    • ELIZABETH WARREN & AMELIA WARREN TYAGI, THE TWO-INCOME TRAP: WHY MIDDLE CLASS PARENTS ARE GOING BROKE 144-52 (2003).
    • ELIZABETH WARREN & AMELIA WARREN TYAGI, THE TWO-INCOME TRAP: WHY MIDDLE CLASS PARENTS ARE GOING BROKE 144-52 (2003).
  • 3
    • 84868913588 scopus 로고    scopus 로고
    • Credit Card Accountability Responsibility and Disclosure Act of 2005, S. 499, 109th Cong. § 311 (2005). This legislation would bar the collection in bankruptcy of loans with interest rates more than 20 percentage points above the federal prime lending rate.
    • Credit Card Accountability Responsibility and Disclosure Act of 2005, S. 499, 109th Cong. § 311 (2005). This legislation would bar the collection in bankruptcy of loans with interest rates more than 20 percentage points above the federal prime lending rate.
  • 4
    • 84868928396 scopus 로고    scopus 로고
    • Credit Card Reform Act of 2006, S. 2655, 109th Cong. § 3 (2006).
    • Credit Card Reform Act of 2006, S. 2655, 109th Cong. § 3 (2006).
  • 5
    • 65349180209 scopus 로고    scopus 로고
    • Examining the Billing, Marketing, and Disclosure Practices of the Credit Card Industry, and Their Impact on Consumers: Hearing Before the S. Comm. on Banking, Housing, and Urban Affairs, 110th Cong. (2007) (statement of Travis B. Plunkett, Legislative Director, Consumer Federation of America), available at http://www.consurnerfed.org/pdfs/Credit-Card-Senate- Testimony-01-07.pdf.
    • Examining the Billing, Marketing, and Disclosure Practices of the Credit Card Industry, and Their Impact on Consumers: Hearing Before the S. Comm. on Banking, Housing, and Urban Affairs, 110th Cong. (2007) (statement of Travis B. Plunkett, Legislative Director, Consumer Federation of America), available at http://www.consurnerfed.org/pdfs/Credit-Card-Senate- Testimony-01-07.pdf.
  • 6
    • 65349136968 scopus 로고    scopus 로고
    • Todd J. Zywicki, The Economics of Credit Cards, 3 CHAP. L. REV. 79, 96 (2000) (arguing that under a legal regime with usury caps on credit cards, credit card issuers would have fewer customers and pawn shops and rent-to-owns would have more).
    • Todd J. Zywicki, The Economics of Credit Cards, 3 CHAP. L. REV. 79, 96 (2000) (arguing that under a legal regime with usury caps on credit cards, "credit card issuers would have fewer customers and pawn shops and rent-to-owns would have more").
  • 7
    • 65349192240 scopus 로고    scopus 로고
    • See, e.g., Timothy J. Muris, Payment Card Regulation and the (Mis)Application of the Economics of Two-Sided Markets, 2005 COLUM. BUS. L. REV. 515, 527 (The growth in credit card credit appears to have resulted primarily from the substitution of cards for alternative, less attractive forms of credit. For instance, many consumers who cannot obtain unsecured credit through credit cards are instead forced to rely on pawn shops and payday lenders.);
    • See, e.g., Timothy J. Muris, Payment Card Regulation and the (Mis)Application of the Economics of Two-Sided Markets, 2005 COLUM. BUS. L. REV. 515, 527 ("The growth in credit card credit appears to have resulted primarily from the substitution of cards for alternative, less attractive forms of credit. For instance, many consumers who cannot obtain unsecured credit through credit cards are instead forced to rely on pawn shops and payday lenders.");
  • 8
    • 65349124748 scopus 로고    scopus 로고
    • Zywicki, supra note 6, at 83 ([Tjhese policies could have dramatic negative consequences for vulnerable low-income consumers who lack the borrowing options of wealthier individuals and as a result may be driven back into the hands of pawnbrokers, rent-to-own financiers, and loan sharks who flourished prior to the deregulation of the credit card market.).
    • Zywicki, supra note 6, at 83 ("[Tjhese policies could have dramatic negative consequences for vulnerable low-income consumers who lack the borrowing options of wealthier individuals and as a result may be driven back into the hands of pawnbrokers, rent-to-own financiers, and loan sharks who flourished prior to the deregulation of the credit card market.").
  • 9
    • 65349104555 scopus 로고    scopus 로고
    • Zywicki, supra note 6, at 96
    • Zywicki, supra note 6, at 96.
  • 10
    • 65349107129 scopus 로고    scopus 로고
    • See discussion infra Part IV.A. 10. See discussion infra Part III.A.
    • See discussion infra Part IV.A. 10. See discussion infra Part III.A.
  • 11
    • 65349141917 scopus 로고    scopus 로고
    • See discussion infra Part III.C.
    • See discussion infra Part III.C.
  • 12
    • 65349158590 scopus 로고    scopus 로고
    • See discussion infra Part III.C.
    • See discussion infra Part III.C.
  • 13
    • 84868913644 scopus 로고    scopus 로고
    • MASS. GEN. LAWS ch. 271, § 49 (1971);
    • MASS. GEN. LAWS ch. 271, § 49 (1971);
  • 14
    • 65349146443 scopus 로고    scopus 로고
    • see also Press Release, Commonwealth of Mass. Office of Consumer Affairs & Bus. Regulation, State Orders More Payday Lenders to Cease Activity in Mass.: Unlicensed Lenders Typically Charge Illegal Fees and Interest Rates (May 26, 2006), available at http://www.mass.gov/?pageID= pressreleases&agId=Eoca&prModName=ocapressrelease&prFile= 06-05-30-lenders.xml. Indeed, only the two participants who mentioned having lived in another state for a substantial period of time had even heard of payday lending.
    • see also Press Release, Commonwealth of Mass. Office of Consumer Affairs & Bus. Regulation, State Orders More Payday Lenders to Cease Activity in Mass.: Unlicensed Lenders Typically Charge Illegal Fees and Interest Rates (May 26, 2006), available at http://www.mass.gov/?pageID= pressreleases&agId=Eoca&prModName=ocapressrelease&prFile= 06-05-30-lenders.xml. Indeed, only the two participants who mentioned having lived in another state for a substantial period of time had even heard of payday lending.
  • 15
    • 65349118165 scopus 로고    scopus 로고
    • In future research, I plan to study families in jurisdictions with a variety of borrowing regimes
    • In future research, I plan to study families in jurisdictions with a variety of borrowing regimes.
  • 16
    • 0345881055 scopus 로고    scopus 로고
    • See David A. Moss & Gibbs A. Johnson, The Rise of Consumer Bankruptcy: Evolution, Revolution, or Both?, 73 AM. BANKR. L.J. 311, 333-37 (1999) (describing the expansion of credit card availability for low- and moderate-income borrowers over the past two and half decades).
    • See David A. Moss & Gibbs A. Johnson, The Rise of Consumer Bankruptcy: Evolution, Revolution, or Both?, 73 AM. BANKR. L.J. 311, 333-37 (1999) (describing the expansion of credit card availability for low- and moderate-income borrowers over the past two and half decades).
  • 17
    • 65349093950 scopus 로고    scopus 로고
    • John Caskey popularized the term fringe banking in JOHN P. CASKEY, FRINGE BANKING: CHECK-CASHING OUTLETS, PAWNSHOPS AND THE POOR 1 (1994).
    • John Caskey popularized the term "fringe banking" in JOHN P. CASKEY, FRINGE BANKING: CHECK-CASHING OUTLETS, PAWNSHOPS AND THE POOR 1 (1994).
  • 18
    • 65349130028 scopus 로고    scopus 로고
    • Michael Barr uses the term alternative credit. Michael S. Barr, Banking the Poor, 21 YALE J. ON REG. 121, 124 (2004).
    • Michael Barr uses the term "alternative credit." Michael S. Barr, Banking the Poor, 21 YALE J. ON REG. 121, 124 (2004).
  • 19
    • 0036863140 scopus 로고    scopus 로고
    • Creola Johnson, Payday Loans: Shrewd Business or Predatory Lending?, 87 MINN. L. REV. 1, 100 n.531 (2002);
    • Creola Johnson, Payday Loans: Shrewd Business or Predatory Lending?, 87 MINN. L. REV. 1, 100 n.531 (2002);
  • 20
    • 40949155917 scopus 로고
    • The Implications of Current Welfare Reform Proposals for the Housing Assistance System, 22
    • Sandra J. Newman, The Implications of Current Welfare Reform Proposals for the Housing Assistance System, 22 FORDHAM URB. L.J. 1231, 1235 (1995).
    • (1995) FORDHAM URB. L.J , vol.1231 , pp. 1235
    • Newman, S.J.1
  • 21
    • 0031254010 scopus 로고    scopus 로고
    • Sampling Hard to Reach Populations, 26
    • See, e.g
    • See, e.g., Jean Faugier & Mary Sargeant, Sampling Hard to Reach Populations, 26 J. ADVANCED NURSING 790, 792 (1997);
    • (1997) J. ADVANCED NURSING , vol.790 , pp. 792
    • Faugier, J.1    Sargeant, M.2
  • 22
    • 0347413625 scopus 로고
    • Using Social Science Research in Family Law Analysis and Formation: Problems and Prospects, 3
    • Sarah H. Ramsey & Robert F. Kelly, Using Social Science Research in Family Law Analysis and Formation: Problems and Prospects, 3 S. CAL. INTERDISC. L.J. 631, 643 (1994).
    • (1994) S. CAL. INTERDISC. L.J , vol.631 , pp. 643
    • Ramsey, S.H.1    Kelly, R.F.2
  • 23
    • 33749872410 scopus 로고    scopus 로고
    • For examples of research using snowball samples to study legal issues, see Jose B. Ash-ford, Comparing the Effects of Judicial Versus Child Protective Service Relationships on Parental Attitudes in the Juvenile Dependency Process, 16 RES. ON SOC. WORK PRAC. 582, 584-86 (2006, using a convenience sample of forty to study the effect of judicial and case-worker relationships on perceptions of fairness by parents in the child-protective services process);
    • For examples of research using snowball samples to study legal issues, see Jose B. Ash-ford, Comparing the Effects of Judicial Versus Child Protective Service Relationships on Parental Attitudes in the Juvenile Dependency Process, 16 RES. ON SOC. WORK PRAC. 582, 584-86 (2006) (using a "convenience sample" of forty to study the effect of judicial and case-worker relationships on perceptions of fairness by parents in the child-protective services process);
  • 24
    • 33749873115 scopus 로고    scopus 로고
    • The Emerging Role of Ethics Advisors, General Counsel, and Other Compliance Specialists in Large Law Firms, 44
    • investigating the emerging role of compliance specialists in large law firms using a snowball sample
    • Elizabeth Chambliss & David B. Wilkins, The Emerging Role of Ethics Advisors, General Counsel, and Other Compliance Specialists in Large Law Firms, 44 ARIZ. L. REV. 559, 561 (2002) (investigating "the emerging role of compliance specialists in large law firms" using a snowball sample);
    • (2002) ARIZ. L. REV , vol.559 , pp. 561
    • Chambliss, E.1    Wilkins, D.B.2
  • 25
    • 84868926208 scopus 로고    scopus 로고
    • Mariano-Florentino Cuéllar, Refugee Security and the Organizational Logic of Legal Mandates, 37 GEO. J. INT'L L. 583, 586 n.6 (2006) (using a snowball sample to obtain one of three sets of interviews on the legal, political, and bureaucratic dynamics affecting refugees' physical security);
    • Mariano-Florentino Cuéllar, Refugee Security and the Organizational Logic of Legal Mandates, 37 GEO. J. INT'L L. 583, 586 n.6 (2006) (using a snowball sample to obtain one of three sets of interviews on "the legal, political, and bureaucratic dynamics affecting refugees' physical security");
  • 26
    • 34247670228 scopus 로고    scopus 로고
    • Rosanna Hertz, The Contemporary Myth of Choice, 596 ANNALS AM. ACAD. POL. & SOC. SCI. 232, 243 n.1 (2004) (reviewing a study in which researcher Phyllis Moen located, through a snowball sample, women who left full-time careers to raise children (citing PHYLLIS MOEN, IT'S ABOUT TIME: COUPLES AND CAREERS (2003))).
    • Rosanna Hertz, The Contemporary Myth of Choice, 596 ANNALS AM. ACAD. POL. & SOC. SCI. 232, 243 n.1 (2004) (reviewing a study in which researcher Phyllis Moen located, through a snowball sample, women who left full-time careers to raise children (citing PHYLLIS MOEN, IT'S ABOUT TIME: COUPLES AND CAREERS (2003))).
  • 27
    • 84868926209 scopus 로고    scopus 로고
    • The difficulty and expense of reaching low-income populations for empirical work is well documented. E.g, Michael S. Barr, Detroit Area Study on Financial Services (Overview, follow Detroit Area Study hyperlink; then Detroit Area Sudy on Financial Services (Overview) hyper-link, last visited Feb. 12, 2009, summarizing the work done in an ongoing empirical study conducted for the University of Michigan's Institute for Social Research, Survey Research Center
    • The difficulty and expense of reaching low-income populations for empirical work is well documented. E.g., Michael S. Barr, Detroit Area Study on Financial Services (Overview), http://www-personal.umich.edu/ ∼msbarr/ (follow "Detroit Area Study" hyperlink; then "Detroit Area Sudy on Financial Services (Overview)" hyper-link) (last visited Feb. 12, 2009) (summarizing the work done in an ongoing empirical study conducted for the University of Michigan's Institute for Social Research, Survey Research Center).
  • 28
    • 65349140610 scopus 로고    scopus 로고
    • I knew twelve population members from previous work in the community
    • I knew twelve population members from previous work in the community.
  • 29
    • 40949156170 scopus 로고    scopus 로고
    • Beyond Usury: A Study of Credit-Card Use and Preference Among Low-Income Consumers, 86
    • See
    • See Angela Littwin, Beyond Usury: A Study of Credit-Card Use and Preference Among Low-Income Consumers, 86 TEX. L. REV 451, 456-57 (2008).
    • (2008) TEX. L. REV , vol.451 , pp. 456-457
    • Littwin, A.1
  • 30
    • 65349115950 scopus 로고    scopus 로고
    • For a detailed discussion of the study methods and a description of the samples, please see the in the companion piece to the article. Id
    • For a detailed discussion of the study methods and a description of the samples, please see the Appendix on Methodology in the companion piece to the article. Id.
    • Appendix on Methodology
  • 31
    • 65349196731 scopus 로고    scopus 로고
    • See generally KLAUS KRIPPENDORFF, CONTENT ANALYSIS: AN INTRODUCTION TO ITS METHODOLOGY (2d ed. 2004);
    • See generally KLAUS KRIPPENDORFF, CONTENT ANALYSIS: AN INTRODUCTION TO ITS METHODOLOGY (2d ed. 2004);
  • 32
    • 65349163347 scopus 로고    scopus 로고
    • ROBERT PHILIP WEBER, BASIC CONTENT ANALYSIS 9 (2d ed. 1990).
    • ROBERT PHILIP WEBER, BASIC CONTENT ANALYSIS 9 (2d ed. 1990).
  • 33
    • 0033481428 scopus 로고    scopus 로고
    • For data on the increase in credit card borrowing, see Edward J. Bird et al., Credit Card Debts of the Poor: High and Rising, 18 J. POL'Y ANALYSIS & MGMT. 125, 128 tbl.1 (1999);
    • For data on the increase in credit card borrowing, see Edward J. Bird et al., Credit Card Debts of the Poor: High and Rising, 18 J. POL'Y ANALYSIS & MGMT. 125, 128 tbl.1 (1999);
  • 34
    • 65349095139 scopus 로고    scopus 로고
    • Moss & Johnson, supra note 15, at 334
    • Moss & Johnson, supra note 15, at 334.
  • 35
    • 65349196105 scopus 로고    scopus 로고
    • See infra Part III.A.1.
    • See infra Part III.A.1.
  • 36
    • 65349137570 scopus 로고    scopus 로고
    • New State Ice Co. v. Liebmann, 285 U.S. 262, 311 (1932) (Brandeis, J., dissenting).
    • New State Ice Co. v. Liebmann, 285 U.S. 262, 311 (1932) (Brandeis, J., dissenting).
  • 37
    • 84888467546 scopus 로고    scopus 로고
    • note 84
    • See infra note 84.
    • See infra
  • 38
    • 34247384995 scopus 로고
    • Usury Laws and Consumer Credit: A Note, 38
    • Richard L. Peterson, Usury Laws and Consumer Credit: A Note, 38 J. FIN. 1299, 1299 (1983).
    • (1983) J. FIN , vol.1299 , pp. 1299
    • Peterson, R.L.1
  • 39
    • 65349099322 scopus 로고    scopus 로고
    • Consumer Indebtedness in the Alternative Financial Services Market: Payday Loans and Other Sources of Consumer Credit
    • U. Mich. Law, Working Paper, Apr
    • Michael Barr et al., Consumer Indebtedness in the Alternative Financial Services Market: Payday Loans and Other Sources of Consumer Credit (U. Mich. Law, Working Paper, Apr. 2007) (on file with the University of Illinois Law Review).
    • (2007) on file with the University of Illinois Law Review
    • Barr, M.1
  • 40
    • 65349165120 scopus 로고    scopus 로고
    • Id
    • Id.
  • 41
    • 65349103967 scopus 로고    scopus 로고
    • Id
    • Id.
  • 42
    • 65349143108 scopus 로고    scopus 로고
    • SCF home page, http://www.federalreserve.gov/Pubs/oss/oss2/scfindex.html (last visited Feb. 12, 2009). The survey measures household wealth, income, and debt for a sample of approximately 4,000 families, depending on the response rate of each year's survey.
    • SCF home page, http://www.federalreserve.gov/Pubs/oss/oss2/scfindex.html (last visited Feb. 12, 2009). The survey measures household wealth, income, and debt for a sample of approximately 4,000 families, depending on the response rate of each year's survey.
  • 43
    • 65349149988 scopus 로고    scopus 로고
    • E.g., Jonathan Zinman, Where Is the Missing Credit Card Debt?: Clues and Implications 2 & n.1 (Fed. Reserve Bank of Phila. Payment Ctr., Discussion Paper No. 07-11, 2007), available at http://papers.ssrn.com/sol3/papers.cfm?abstract-id=1031518.
    • E.g., Jonathan Zinman, Where Is the Missing Credit Card Debt?: Clues and Implications 2 & n.1 (Fed. Reserve Bank of Phila. Payment Ctr., Discussion Paper No. 07-11, 2007), available at http://papers.ssrn.com/sol3/papers.cfm?abstract-id=1031518.
  • 44
    • 65349121789 scopus 로고    scopus 로고
    • Posting of Bob Lawless to Credit Slips, http://www.creditslips.org/ creditslips/2007/08/pulliam-weston-.html#more (Aug. 1, 2007, 11:28 p.m.).
    • Posting of Bob Lawless to Credit Slips, http://www.creditslips.org/ creditslips/2007/08/pulliam-weston-.html#more (Aug. 1, 2007, 11:28 p.m.).
  • 45
    • 65349121208 scopus 로고    scopus 로고
    • See, e.g., Brian K. Bucks et al., Recent Changes in U.S. Family Finances: Evidence from the 2001 and 2004 Survey of Consumer Finances, 92 Fed. Res. Bull. Al, A38 (2006), available at http://www.federalreserve. gov/pubs/bulletin/2006/financesurvey.pdf (explaining the protocol the survey uses when respondents are unable or unwilling to provide exact figures). This contrasts with the methodology of the Consumer Bankruptcy Project, which obtains most of its income, debt, and asset data from court records.
    • See, e.g., Brian K. Bucks et al., Recent Changes in U.S. Family Finances: Evidence from the 2001 and 2004 Survey of Consumer Finances, 92 Fed. Res. Bull. Al, A38 (2006), available at http://www.federalreserve. gov/pubs/bulletin/2006/financesurvey.pdf (explaining the protocol the survey uses when respondents are unable or unwilling to provide exact figures). This contrasts with the methodology of the Consumer Bankruptcy Project, which obtains most of its income, debt, and asset data from court records.
  • 46
    • 0030227616 scopus 로고    scopus 로고
    • A Medical Record Linkage Analysis of Abortion Underreporting, 28
    • Underreporting is a concern in research that examines stigmatized topics such as abortion
    • Underreporting is a concern in research that examines stigmatized topics such as abortion, J. Richard Udry et al., A Medical Record Linkage Analysis of Abortion Underreporting, 28 FAMILY PLAN. PERSP. 228, 228-31 (1996);
    • (1996) FAMILY PLAN. PERSP , vol.228 , pp. 228-231
    • Richard Udry, J.1
  • 47
    • 0141905185 scopus 로고    scopus 로고
    • premarital sex, Barbara S. Mensch et al., The Reporting of Sensitive Behavior by Adolescents: A Methodological Experiment in Kenya, 40 DEMOGRAPHY 247, 247-68 (2003);
    • premarital sex, Barbara S. Mensch et al., The Reporting of Sensitive Behavior by Adolescents: A Methodological Experiment in Kenya, 40 DEMOGRAPHY 247, 247-68 (2003);
  • 48
    • 0036617357 scopus 로고    scopus 로고
    • and caloric intake among overweight women, Debra C. McKenzie et al., Impact of Interviewer's Body Mass Index on Underreporting Energy Intake in Overweight and Obese Women, 10 OBESITY RES. 471, 471-77 (2002).
    • and caloric intake among overweight women, Debra C. McKenzie et al., Impact of Interviewer's Body Mass Index on Underreporting Energy Intake in Overweight and Obese Women, 10 OBESITY RES. 471, 471-77 (2002).
  • 49
    • 65349127560 scopus 로고    scopus 로고
    • See Zinman, supra note 32
    • See Zinman, supra note 32.
  • 50
    • 65349192239 scopus 로고    scopus 로고
    • Rochelle L. Antoniewicz, A Comparison of the Household Sector from the Flow of Funds Accounts and the Survey of Consumer Finances 19-21 (Fed. Reserve Bd. Fin. & Econ. Discussion Series, Working Paper No. 1996-26, 1996), available at http://www.federalreserve.gov/pubs/feds/1996/ 199626/199626pap.pdf.
    • Rochelle L. Antoniewicz, A Comparison of the Household Sector from the Flow of Funds Accounts and the Survey of Consumer Finances 19-21 (Fed. Reserve Bd. Fin. & Econ. Discussion Series, Working Paper No. 1996-26, 1996), available at http://www.federalreserve.gov/pubs/feds/1996/ 199626/199626pap.pdf.
  • 51
    • 65349151281 scopus 로고    scopus 로고
    • There may be other flaws in its methodology, however. Wendy M. Edelberg & Jonas D.M. Fisher, Household Debt, CHI. FED LETTER (Fed. Reserve Bank of Chi., Chi., III.), Nov. 1997, at 1-2, available at http://www.chicagofed.org/publications/fedletter/1997/ cflnov97.pdf (arguing that the SCF is more accurate than the macro data because it is based on direct evidence).
    • There may be other flaws in its methodology, however. Wendy M. Edelberg & Jonas D.M. Fisher, Household Debt, CHI. FED LETTER (Fed. Reserve Bank of Chi., Chi., III.), Nov. 1997, at 1-2, available at http://www.chicagofed.org/publications/fedletter/1997/ cflnov97.pdf (arguing that the SCF is more accurate than the macro data because it is based on direct evidence).
  • 52
    • 65349125310 scopus 로고    scopus 로고
    • note 37, at, explaining where the studies diverge but not taking a position as to which is more correct
    • Antoniewicz, supra note 37, at 10-11 (explaining where the studies diverge but not taking a position as to which is more correct).
    • supra , pp. 10-11
    • Antoniewicz1
  • 53
    • 65349163549 scopus 로고    scopus 로고
    • For another Federal Reserve explanation of the differences, see Ana M. Aizcorbe et al., Recent Changes in U.S. Family Finances: Evidence from the 1998 and 2001 Survey of Consumer Finances, 89 Fed. Res. Bull. 1, 27 n.30 (2003), available at http://www. federalreserve.gov/pubs/bulletin/2003/ 01031ead.pdf.
    • For another Federal Reserve explanation of the differences, see Ana M. Aizcorbe et al., Recent Changes in U.S. Family Finances: Evidence from the 1998 and 2001 Survey of Consumer Finances, 89 Fed. Res. Bull. 1, 27 n.30 (2003), available at http://www. federalreserve.gov/pubs/bulletin/2003/ 01031ead.pdf.
  • 54
    • 65349149367 scopus 로고    scopus 로고
    • The Consumer Bankruptcy Project also studies debt at the household level, but it is limited to families in bankruptcy, so it cannot provide data on questions of borrowing substitution among families who are not financially distressed
    • The Consumer Bankruptcy Project also studies debt at the household level, but it is limited to families in bankruptcy, so it cannot provide data on questions of borrowing substitution among families who are not financially distressed.
  • 55
    • 0010209574 scopus 로고
    • Household Sector Borrowing and the Burden of Debt, 81 Fed
    • Glenn B. Canner et al., Household Sector Borrowing and the Burden of Debt, 81 Fed. Res. Bull. 323, 323 (1995).
    • (1995) Res. Bull , vol.323 , pp. 323
    • Canner, G.B.1
  • 56
    • 65349139438 scopus 로고    scopus 로고
    • Edelberg & Fisher, supra note 38, at 1
    • Edelberg & Fisher, supra note 38, at 1.
  • 57
    • 65349168363 scopus 로고    scopus 로고
    • Id
    • Id.
  • 58
    • 65349110319 scopus 로고    scopus 로고
    • Id
    • Id.
  • 59
    • 65349103545 scopus 로고    scopus 로고
    • Id
    • Id.
  • 60
    • 0141697896 scopus 로고    scopus 로고
    • note 41, at chart 2;
    • Canner et al., supra note 41, at 324 chart 2;
    • supra , pp. 324
    • Canner1
  • 61
    • 65349177724 scopus 로고    scopus 로고
    • Karen Dynan et al., Recent Changes to a Measure of U.S. Household Debt Service, 89 Fed. Res. Bull. 417, 420 chart 1 (2003). Both articles present data showing that the authors' calculation of the consumer debt burden has increased only slightly over recent decades. The relevance of these findings for the substitution hypothesis is that for the total debt burden to remain relatively constant during a period in which the credit card debt burden was increasing, the non-credit card debt burden must have been decreasing.
    • Karen Dynan et al., Recent Changes to a Measure of U.S. Household Debt Service, 89 Fed. Res. Bull. 417, 420 chart 1 (2003). Both articles present data showing that the authors' calculation of the consumer debt burden has increased only slightly over recent decades. The relevance of these findings for the substitution hypothesis is that for the total debt burden to remain relatively constant during a period in which the credit card debt burden was increasing, the non-credit card debt burden must have been decreasing.
  • 62
    • 65349174472 scopus 로고    scopus 로고
    • Thomas A. Durkin, Credit Cards: Use and Consumer Attitudes, 1970-2000, 86 Fed. Res. Bull. 623, 623-24 (2000), available at http://www.federalreserve.gov/pubs/bulletin/2000/09001ead.pdf.
    • Thomas A. Durkin, Credit Cards: Use and Consumer Attitudes, 1970-2000, 86 Fed. Res. Bull. 623, 623-24 (2000), available at http://www.federalreserve.gov/pubs/bulletin/2000/09001ead.pdf.
  • 63
    • 84868929685 scopus 로고    scopus 로고
    • Telephone Interview with Tomas A. Durkin, Div. of Research & Statistics, Fed. Reserve Bulletin June 22, 2007, The G.19 data is available at Federal Reserve, last visited Feb. 12, 2009
    • Telephone Interview with Tomas A. Durkin, Div. of Research & Statistics, Fed. Reserve Bulletin (June 22, 2007). The G.19 data is available at Federal Reserve, http://www.federalreserve. gov/reIeases/g19/ (last visited Feb. 12, 2009).
  • 64
    • 65349099327 scopus 로고    scopus 로고
    • This is when the Federal Reserve started tracking revolving debt separately. Durkin, supra note 47, at 624 fig.1
    • This is when the Federal Reserve started tracking revolving debt separately. Durkin, supra note 47, at 624 fig.1.
  • 65
    • 65349121189 scopus 로고    scopus 로고
    • All of these figures exclude mortgage credit. Id. at 623.
    • All of these figures exclude mortgage credit. Id. at 623.
  • 66
    • 65349175885 scopus 로고    scopus 로고
    • Id
    • Id.
  • 67
    • 0035635790 scopus 로고    scopus 로고
    • See Yi-Win Chien & Sharon A. Devaney, The Effects of Credit Attitude and Socioeconomic Factors on Credit Card and Installment Debt, 35 J. CONSUMER AFF. 162, 165-66 (2001).
    • See Yi-Win Chien & Sharon A. Devaney, The Effects of Credit Attitude and Socioeconomic Factors on Credit Card and Installment Debt, 35 J. CONSUMER AFF. 162, 165-66 (2001).
  • 68
    • 65349175640 scopus 로고    scopus 로고
    • See Dynan et al, supra note 46, at 421-22
    • See Dynan et al., supra note 46, at 421-22.
  • 69
    • 65349151302 scopus 로고    scopus 로고
    • See, e.g, Durkin, supra note 47, at 624
    • See, e.g., Durkin, supra note 47, at 624.
  • 70
    • 65349131215 scopus 로고    scopus 로고
    • In the SCF studies, installment includes automobile loans, student loans, and loans for furniture, appliances, and other durable goods. Bucks et al., supra note 34, at A30 n.39.
    • In the SCF studies, installment includes "automobile loans, student loans, and loans for furniture, appliances, and other durable goods." Bucks et al., supra note 34, at A30 n.39.
  • 71
    • 65349140049 scopus 로고    scopus 로고
    • Most of the aggregate research defines installment debt similarly. See Durkin, supra note 47, at 624 n.1 (defining non-revolving debt [as] secured and unsecured credit for automobiles, mobile homes, trailers, durable goods, vacations, and other purposes);
    • Most of the aggregate research defines installment debt similarly. See Durkin, supra note 47, at 624 n.1 (defining "non-revolving debt [as] secured and unsecured credit for automobiles, mobile homes, trailers, durable goods, vacations, and other purposes");
  • 72
    • 65349158216 scopus 로고    scopus 로고
    • Dynan et al., supra note 46, at 418 (analyzing a debt category called nonauto, non-revolving debt, which includes student, mobile home, RV and marine, and personal loans).
    • Dynan et al., supra note 46, at 418 (analyzing a debt category called "nonauto, non-revolving" debt, which includes student, mobile home, RV and marine, and personal loans).
  • 73
    • 65349091911 scopus 로고    scopus 로고
    • Bucks et al, supra note 34, at A30
    • Bucks et al., supra note 34, at A30.
  • 74
    • 65349148453 scopus 로고    scopus 로고
    • Id
    • Id.
  • 75
    • 65349118774 scopus 로고    scopus 로고
    • Id
    • Id.
  • 76
    • 65349099328 scopus 로고    scopus 로고
    • See Durkin, supra note 47, at 626
    • See Durkin, supra note 47, at 626.
  • 77
    • 65349104538 scopus 로고    scopus 로고
    • Id. at 624 fig.1.
    • Id. at 624 fig.1.
  • 78
    • 84868926205 scopus 로고    scopus 로고
    • This conclusion is drawn from an original analysis of data from the 1962 Survey of Financial Characteristics of Consumers (the predecessor to the SCF, The data is available at last visited Feb. 12, 2009
    • This conclusion is drawn from an original analysis of data from the 1962 Survey of Financial Characteristics of Consumers (the predecessor to the SCF). The data is available at http://www. federalreserve.gov/Pubs/OSS/oss2/6263/ sfcc6263home.html (last visited Feb. 12, 2009).
  • 79
    • 65349099329 scopus 로고    scopus 로고
    • Id.;
    • Id.;
  • 80
    • 65349121190 scopus 로고    scopus 로고
    • Bucks et al, supra note 34, at A30
    • Bucks et al., supra note 34, at A30.
  • 81
    • 65349119350 scopus 로고    scopus 로고
    • Dynan et al, supra note 46, at 421-22
    • Dynan et al., supra note 46, at 421-22.
  • 83
    • 65349118773 scopus 로고    scopus 로고
    • For a description of the methodology used to calculate the measure used in Canner et al., supra note 41, see Lynn Paquette, Estimating Household Debt Service Payments, FED. RES. BANK N.Y. Q. REV., Summer 1986, at 12, 16, available at http://www.newyorkfed.org/research/quarterly-review/1986vll/vlln2article2.pdf.
    • For a description of the methodology used to calculate the measure used in Canner et al., supra note 41, see Lynn Paquette, Estimating Household Debt Service Payments, FED. RES. BANK N.Y. Q. REV., Summer 1986, at 12, 16, available at http://www.newyorkfed.org/research/quarterly-review/1986vll/vlln2article2.pdf.
  • 84
    • 65349117566 scopus 로고    scopus 로고
    • Forty-Two Percent-42%-of Americans Are Making Minimum or No Payments on Their Credit Card Balances, According to the Cambridge Consumer Credit Index, BUS. WIRE, Mar. 5, 2004, available at http://findarticles.com/p/articles/mi-moEIN/is-2004-March-5/ai-113928683.
    • Forty-Two Percent-42%-of Americans Are Making Minimum or No Payments on Their Credit Card Balances, According to the Cambridge Consumer Credit Index, BUS. WIRE, Mar. 5, 2004, available at http://findarticles.com/p/articles/mi-moEIN/is-2004-March-5/ai-113928683.
  • 85
    • 65349175099 scopus 로고    scopus 로고
    • Paquette, supra note 64, at 16. In 1986, the minimum payment was 5% of the balance for bank cards, 8% for store cards, and 20% for gas station cards. Id.
    • Paquette, supra note 64, at 16. In 1986, the minimum payment was 5% of the balance for bank cards, 8% for store cards, and 20% for gas station cards. Id.
  • 87
    • 65349186453 scopus 로고    scopus 로고
    • Joint Press Release, Bd. of Governors of the Fed. Reserve Sys. et at., FFIEC Agencies Issue Guidance on Credit Card Account Management and Loss Allowance Practices (Jan. 8, 2003), available at http://www.occ.treas. gov/ftp/release/2003-01.htm.
    • Joint Press Release, Bd. of Governors of the Fed. Reserve Sys. et at., FFIEC Agencies Issue Guidance on Credit Card Account Management and Loss Allowance Practices (Jan. 8, 2003), available at http://www.occ.treas. gov/ftp/release/2003-01.htm.
  • 88
    • 65349194420 scopus 로고    scopus 로고
    • See infra Part IV.C.2.
    • See infra Part IV.C.2.
  • 89
    • 65349151891 scopus 로고    scopus 로고
    • CASKEY, supra note 16, at 47-48
    • CASKEY, supra note 16, at 47-48.
  • 90
    • 65349108057 scopus 로고    scopus 로고
    • See, e.g., Dynan et al., supra note 46, at 417 (the goal of the article was to update a measure of household debt service ratio to reflect changes in financial markets).
    • See, e.g., Dynan et al., supra note 46, at 417 (the goal of the article was to update a measure of household debt service ratio to reflect changes in financial markets).
  • 91
    • 84883256465 scopus 로고
    • Bank of Minneapolis v
    • U.S
    • Marquette Nat'l Bank of Minneapolis v. First Omaha Serv. Corp., 439 U.S. 299 (1978).
    • (1978) First Omaha Serv. Corp , vol.439 , pp. 299
    • Nat'l, M.1
  • 92
    • 65349096158 scopus 로고    scopus 로고
    • For further discussion of Marquette, see infra note 85.
    • For further discussion of Marquette, see infra note 85.
  • 93
    • 65349175657 scopus 로고    scopus 로고
    • Richard L. Peterson & Gregory A. Falls, Impact of a Ten Percent Usury Ceiling: Empirical Evidence 15 (Credit Research Ctr., Working Paper No. 40, 1981), available at http://www.business. gwu.edu/research/ centers/fsrp/pdf/WP40.pdf; Peterson, supra note 27, at 1299-1304.
    • Richard L. Peterson & Gregory A. Falls, Impact of a Ten Percent Usury Ceiling: Empirical Evidence 15 (Credit Research Ctr., Working Paper No. 40, 1981), available at http://www.business. gwu.edu/research/ centers/fsrp/pdf/WP40.pdf; Peterson, supra note 27, at 1299-1304.
  • 94
    • 65349089046 scopus 로고    scopus 로고
    • Peterson & Falls, supra note 73, at 16
    • Peterson & Falls, supra note 73, at 16.
  • 95
    • 65349158589 scopus 로고    scopus 로고
    • Id. at 3
    • Id. at 3.
  • 96
    • 65349164165 scopus 로고    scopus 로고
    • Id. at 3, 5
    • Id. at 3, 5.
  • 97
    • 84868913635 scopus 로고    scopus 로고
    • In 1979, the year of the study, Arkansas's usury cap of 10% was below the prime rate. HSH Associates Financial Publishers, ARM Indexes: Prime Rate, 1975-1979, last visited Feb. 16, 2009
    • In 1979, the year of the study, Arkansas's usury cap of 10% was below the prime rate. HSH Associates Financial Publishers, ARM Indexes: Prime Rate, 1975-1979, http://www.hsh.com/indices/ prime70s.html (last visited Feb. 16, 2009).
  • 98
    • 34548358527 scopus 로고    scopus 로고
    • note 27, at tbl.I;
    • Peterson, supra note 27, at 1301 tbl.I;
    • supra , pp. 1301
    • Peterson1
  • 99
    • 65349116556 scopus 로고    scopus 로고
    • Peterson & Falls, supra note 73, at 6-7, 9-10, 13-14;
    • Peterson & Falls, supra note 73, at 6-7, 9-10, 13-14;
  • 100
    • 34547766999 scopus 로고    scopus 로고
    • On the Feasibility of Improving
    • see also, Patent Quality One Technology at a Time: The Case of Business Methods, 21 BERKELEY TECH. L.J. 729, 748 n.57 stating that 0.05 is the traditional level for significance of results
    • see also John R. Allison & Starling D. Hunter, On the Feasibility of Improving Patent Quality One Technology at a Time: The Case of Business Methods, 21 BERKELEY TECH. L.J. 729, 748 n.57 (stating that 0.05 is the "traditional level" for significance of results).
    • Allison, J.R.1    Hunter, S.D.2
  • 101
    • 65349190548 scopus 로고    scopus 로고
    • See CASKEY, supra note 16, at 27-30
    • See CASKEY, supra note 16, at 27-30.
  • 102
    • 65349105883 scopus 로고    scopus 로고
    • Peterson & Falls, supra note 73, at 17
    • Peterson & Falls, supra note 73, at 17.
  • 103
    • 65349114750 scopus 로고    scopus 로고
    • See CASKEY, supra note 16, at 50-51
    • See CASKEY, supra note 16, at 50-51.
  • 104
    • 65349101143 scopus 로고    scopus 로고
    • POLICIS, ECONOMIC AND SOCIAL RISKS OF CONSUMER CREDIT MARKET REGULATION (2006) [hereinafter ECONOMIC AND SOCIAL RISKS], http://www.policis.com/pdf/Economic-and-Social-Risks-of-Consumer-Credit-Market- Regulation.pdf;
    • POLICIS, ECONOMIC AND SOCIAL RISKS OF CONSUMER CREDIT MARKET REGULATION (2006) [hereinafter ECONOMIC AND SOCIAL RISKS], http://www.policis.com/pdf/Economic-and-Social-Risks-of-Consumer-Credit-Market- Regulation.pdf;
  • 105
    • 65349163547 scopus 로고    scopus 로고
    • POLICIS, THE EFFECT OF INTEREST RATE CONTROLS IN OTHER COUNTRIES (2004) [hereinafter DTI Report], http://microfinancegateway. com/files/25620-file-The- effect-of-interest-rate-controls.pdf. In 2005, the Department of Trade and Industry was disbanded with the creation of the Department for Business, Enterprise, and Regulatory Reform and the Department for Innovation, Universities, and Skills.
    • POLICIS, THE EFFECT OF INTEREST RATE CONTROLS IN OTHER COUNTRIES (2004) [hereinafter DTI Report], http://microfinancegateway. com/files/25620-file-The- effect-of-interest-rate-controls.pdf. In 2005, the Department of Trade and Industry was disbanded with the creation of the Department for Business, Enterprise, and Regulatory Reform and the Department for Innovation, Universities, and Skills.
  • 106
    • 65349100520 scopus 로고    scopus 로고
    • DTI REPORT, supra note 82, at 44
    • DTI REPORT, supra note 82, at 44.
  • 107
    • 65349134131 scopus 로고    scopus 로고
    • The rate was 3% of low-income or credit-impaired borrowers in the UK, compared to 7% in France and 8% in Germany. Id.
    • The rate was 3% of low-income or credit-impaired borrowers in the UK, compared to 7% in France and 8% in Germany. Id.
  • 108
    • 65349170094 scopus 로고    scopus 로고
    • Id. at 6-7
    • Id. at 6-7.
  • 109
    • 65349095159 scopus 로고    scopus 로고
    • See, e.g., id. at 6. In 1978, the Supreme Court of the United States effectively held that state usury laws were preempted. Marquette Nat'l Bank of Minneapolis v. First Omaha Serv. Corp., 439 U.S. 299, 319 (1978).
    • See, e.g., id. at 6. In 1978, the Supreme Court of the United States effectively held that state usury laws were preempted. Marquette Nat'l Bank of Minneapolis v. First Omaha Serv. Corp., 439 U.S. 299, 319 (1978).
  • 110
    • 23744482752 scopus 로고    scopus 로고
    • In Marquette, the Court held that section 85 of the National Bank Act allowed national banks to export the interest rate allowed by the bank's home state to customers living in other states. Id. at 314. Federal statute gave state-chartered banks this same right in 1980. Depository Institutions Deregulation and Monetary Control Act of 1980, Pub. L. No. 96-221, 94 Stat. 132 (codified as amended in scattered sections of 12 U.S.C, This prompted a race to the bottom in which credit card issuers moved to states with no usury laws, and some states with strict usury laws relaxed theirs in order to maintain their banking sectors. As a result of this trend, credit card issuers have more control over the interest rates they charge than state regulators. E.g, Christopher L. Peterson, Federalism and Predatory Lending: Unmasking the Deregulatory Agenda, 78 TEMP. L. REV. 1, 36-37 2005
    • In Marquette, the Court held that section 85 of the National Bank Act allowed national banks to "export" the interest rate allowed by the bank's home state to customers living in other states. Id. at 314. Federal statute gave state-chartered banks this same right in 1980. Depository Institutions Deregulation and Monetary Control Act of 1980, Pub. L. No. 96-221, 94 Stat. 132 (codified as amended in scattered sections of 12 U.S.C.). This prompted a race to the bottom in which credit card issuers moved to states with no usury laws, and some states with strict usury laws relaxed theirs in order to maintain their banking sectors. As a result of this trend, credit card issuers have more control over the interest rates they charge than state regulators. E.g., Christopher L. Peterson, Federalism and Predatory Lending: Unmasking the Deregulatory Agenda, 78 TEMP. L. REV. 1, 36-37 (2005).
  • 111
    • 34248643173 scopus 로고    scopus 로고
    • Until the actions of federal regulators in the early 2000s, payday lenders made use of the exportation doctrine by partnering with banks through what became known as rent-a-charter agreements. See, e.g., Ronald J. Mann & Jim Hawkins, Just Until Payday, 54 UCLA L. REV. 855, 872 (2007).
    • Until the actions of federal regulators in the early 2000s, payday lenders made use of the exportation doctrine by partnering with banks through what became known as "rent-a-charter" agreements. See, e.g., Ronald J. Mann & Jim Hawkins, Just Until Payday, 54 UCLA L. REV. 855, 872 (2007).
  • 112
    • 65349152490 scopus 로고    scopus 로고
    • The OCC and the FDIC ended this practice for national and state banks, respectively
    • The OCC and the FDIC ended this practice for national and state banks, respectively.
  • 113
    • 65349192800 scopus 로고    scopus 로고
    • For steps taken by the OCC, see OFFICE OF THE COMPTROLLER OF THE CURRENCY, U.S. DEP'T OF THE TREASURY, ADVISORY LETTER 2000-9: THIRD-PARTY RISK (2000), available at http://www.occ. treas.gov/ftp/ advisory/2000-9.doc;
    • For steps taken by the OCC, see OFFICE OF THE COMPTROLLER OF THE CURRENCY, U.S. DEP'T OF THE TREASURY, ADVISORY LETTER 2000-9: THIRD-PARTY RISK (2000), available at http://www.occ. treas.gov/ftp/ advisory/2000-9.doc;
  • 114
    • 65349132949 scopus 로고    scopus 로고
    • OFFICE OF THE COMPTROLLER OF THE CURRENCY, U.S. DEP'T OF THE TREASURY, ADVISORY LETTER 2000-10: PAYDAY LENDING (2000), available at http://www.occ. treas.gov/ftp/advisory/2000-10.doc;
    • OFFICE OF THE COMPTROLLER OF THE CURRENCY, U.S. DEP'T OF THE TREASURY, ADVISORY LETTER 2000-10: PAYDAY LENDING (2000), available at http://www.occ. treas.gov/ftp/advisory/2000-10.doc;
  • 115
    • 65349132950 scopus 로고    scopus 로고
    • OFFICE OF THE COMPTROLLER OF THE CURRENCY, U.S. DEP'T OF THE TREASURY, OCC BULL. No. 2001-47: THIRD-PARTY RELATIONSHIPS (2001), available at http://www.occ.treas.gov/ftp/bulletin/2001-47.doc.
    • OFFICE OF THE COMPTROLLER OF THE CURRENCY, U.S. DEP'T OF THE TREASURY, OCC BULL. No. 2001-47: THIRD-PARTY RELATIONSHIPS (2001), available at http://www.occ.treas.gov/ftp/bulletin/2001-47.doc.
  • 116
    • 65349149967 scopus 로고    scopus 로고
    • For FDIC action, see Fed. Deposit Ins. Corp., Guidelines for Payday Lending, http://www.fdic.gov/news/news/financial/2005/fill405a.html (last visited Feb. 16, 2009).
    • For FDIC action, see Fed. Deposit Ins. Corp., Guidelines for Payday Lending, http://www.fdic.gov/news/news/financial/2005/fill405a.html (last visited Feb. 16, 2009).
  • 117
    • 65349167800 scopus 로고    scopus 로고
    • DTI REPORT, supra note 82, at 6
    • DTI REPORT, supra note 82, at 6.
  • 118
    • 65349124730 scopus 로고    scopus 로고
    • Id. at fig.17
    • Id. at fig.17.
  • 119
    • 65349183466 scopus 로고    scopus 로고
    • The pawn shop revenue data was mixed, though it was more suggestive of a low level of substitution than a higher one. Id.
    • The pawn shop revenue data was mixed, though it was more suggestive of a low level of substitution than a higher one. Id.
  • 120
    • 65349104554 scopus 로고    scopus 로고
    • Donald P. Morgan, Defining and Detecting Predatory Lending 20-21 (Fed. Reserve Bank of N.Y. Staff Report, Working Paper No. 273, 2007), available at http://papers.ssrn.com/sol3/papers. cfm?abstract-id=962711.
    • Donald P. Morgan, Defining and Detecting Predatory Lending 20-21 (Fed. Reserve Bank of N.Y. Staff Report, Working Paper No. 273, 2007), available at http://papers.ssrn.com/sol3/papers. cfm?abstract-id=962711.
  • 121
    • 65349137576 scopus 로고    scopus 로고
    • Id. at 5-6 (quoting JOHN P. CASKEY, FILENE RESEARCH INST., THE ECONOMICS OF PAYDAY LENDING 14 (2002)).
    • Id. at 5-6 (quoting JOHN P. CASKEY, FILENE RESEARCH INST., THE ECONOMICS OF PAYDAY LENDING 14 (2002)).
  • 122
    • 84868926203 scopus 로고    scopus 로고
    • CASKEY, supra note 90, at 22 tbl.1 (reporting the results of a Credit Research Center that found slightly over half of payday loan customers have annual income between $25,000 and $50,000, with the remaining customers split equally between higher- and lower-income groups).
    • CASKEY, supra note 90, at 22 tbl.1 (reporting the results of a Credit Research Center that found slightly over half of payday loan customers have annual income between $25,000 and $50,000, with the remaining customers split equally between higher- and lower-income groups).
  • 123
    • 84868929683 scopus 로고    scopus 로고
    • In contrast, only 28.1% of active pawn shop borrowers have incomes ranging from $25,000 to $49,000, and only 7.1% have incomes above that range. ROBERT W. JOHNSON & DIXIE P. JOHNSON, THE CREDIT RESEARCH CTR., PAWNBROKING IN THE U.S.: A PROFILE OF CUSTOMERS 53 (1998), available at http://www.business.gwu.edu/research/centers/fsrp/ pdf/Mono34.pdf.
    • In contrast, only 28.1% of active pawn shop borrowers have incomes ranging from $25,000 to $49,000, and only 7.1% have incomes above that range. ROBERT W. JOHNSON & DIXIE P. JOHNSON, THE CREDIT RESEARCH CTR., PAWNBROKING IN THE U.S.: A PROFILE OF CUSTOMERS 53 (1998), available at http://www.business.gwu.edu/research/centers/fsrp/ pdf/Mono34.pdf.
  • 124
    • 65349097339 scopus 로고    scopus 로고
    • CTR. FOR RESPONSIBLE LENDING, CRL REVIEW OF DEFINING AND DETECTING PREDATORY LENDING, BY DONALD P. MORGAN, FEDERAL RESERVE BANK OF NEW YORK, JANUARY 2007 1-3 (2007), available at http://www.responsiblelending.org/pdfs/ Review-of-Morgan-paper.pdf. The changes resulted from the OCC and FDIC actions that eliminated rent-a-charter agreements, which were discussed in note 86, supra.
    • CTR. FOR RESPONSIBLE LENDING, CRL REVIEW OF DEFINING AND DETECTING PREDATORY LENDING, BY DONALD P. MORGAN, FEDERAL RESERVE BANK OF NEW YORK, JANUARY 2007 1-3 (2007), available at http://www.responsiblelending.org/pdfs/ Review-of-Morgan-paper.pdf. The changes resulted from the OCC and FDIC actions that eliminated "rent-a-charter" agreements, which were discussed in note 86, supra.
  • 125
    • 84963456897 scopus 로고    scopus 로고
    • note 85 and accompanying text
    • See supra note 85 and accompanying text.
    • See supra
  • 126
    • 65349175658 scopus 로고    scopus 로고
    • See supra note 86
    • See supra note 86.
  • 127
    • 65349149074 scopus 로고    scopus 로고
    • So Long for 528% Loans - and Also the Lenders?
    • E.g, June 7, at
    • E.g., Bill Graves, So Long for 528% Loans - and Also the Lenders?, OREGONIAN, June 7, 2007, at A01.
    • (2007) OREGONIAN
    • Graves, B.1
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    • Barr et al, supra note 28
    • Barr et al., supra note 28.
  • 129
    • 65349084959 scopus 로고    scopus 로고
    • Id. at 5, 13
    • Id. at 5, 13.
  • 130
    • 65349167817 scopus 로고    scopus 로고
    • Id. at 12
    • Id. at 12.
  • 131
    • 65349130622 scopus 로고    scopus 로고
    • Id. at 15-17
    • Id. at 15-17.
  • 132
    • 65349127580 scopus 로고    scopus 로고
    • Id
    • Id.
  • 133
    • 65349099352 scopus 로고    scopus 로고
    • Id. at 2
    • Id. at 2.
  • 134
    • 65349163548 scopus 로고    scopus 로고
    • Id
    • Id.
  • 135
    • 65349088450 scopus 로고    scopus 로고
    • For this purpose, it likely presents a lower risk than for the SCF because the relevant data is whether a participant has used a form of borrowing, which is easier to recall than precise amounts of debt
    • For this purpose, it likely presents a lower risk than for the SCF because the relevant data is whether a participant has used a form of borrowing, which is easier to recall than precise amounts of debt.
  • 136
    • 65349109211 scopus 로고    scopus 로고
    • See Littwin, supra note 20, at 498 n.202 and accompanying text.
    • See Littwin, supra note 20, at 498 n.202 and accompanying text.
  • 137
    • 65349145813 scopus 로고    scopus 로고
    • Unfortunately, the variables that could best test the interchangeability prong of the substitution hypothesis, a participant's current total credit card balance and her lifetime total credit card balance, were not reliable. In the case of the former, the study was able to collect written records documenting most current balances, but participants with larger balances tended to have more complete documentation introducing bias into this variable. The measurement of total lifetime balances suffered from even greater difficulties. Many participants could provide only vague approximations of the amount of credit card debt they had accumulated over the course of their lifetimes, and documents for this figure were difficult to obtain. Though most participants had current credit card statements or were willing to access them for the study, fewer would or could access this information for cards they no longer held. This left me with credit reports, which do not reach back more than ten years
    • Unfortunately, the variables that could best test the interchangeability prong of the substitution hypothesis, a participant's current total credit card balance and her lifetime total credit card balance, were not reliable. In the case of the former, the study was able to collect written records documenting most current balances, but participants with larger balances tended to have more complete documentation introducing bias into this variable. The measurement of total lifetime balances suffered from even greater difficulties. Many participants could provide only vague approximations of the amount of credit card debt they had accumulated over the course of their lifetimes, and documents for this figure were difficult to obtain. Though most participants had current credit card statements or were willing to access them for the study, fewer would or could access this information for cards they no longer held. This left me with credit reports, which do not reach back more than ten years. Thus, I did not attempt to analyze this variable because the sparse data I did have was unreliable by the participants' own accounts. It would take a study with much greater resources to obtain this data.
  • 138
    • 84883256465 scopus 로고
    • Bank of Minneapolis v
    • U.S. 299
    • Marquette Nat'l Bank of Minneapolis v. First of Omaha Serv. Corp., 439 U.S. 299, 299 (1978).
    • (1978) First of Omaha Serv. Corp , vol.439 , pp. 299
    • Nat'l, M.1
  • 139
    • 65349115932 scopus 로고    scopus 로고
    • Moss & Johnson, supra note 15, at 334
    • Moss & Johnson, supra note 15, at 334.
  • 140
    • 65349105346 scopus 로고    scopus 로고
    • note 23, at tbl.l analyzing SCF data
    • Bird et al., supra note 23, at 128 tbl.l (analyzing SCF data).
    • supra , pp. 128
    • Bird1
  • 141
    • 65349145814 scopus 로고    scopus 로고
    • Moss & Johnson, supra note 15, at 334
    • Moss & Johnson, supra note 15, at 334.
  • 142
    • 65349182373 scopus 로고    scopus 로고
    • Bird et al, supra note 23, at 128
    • Bird et al., supra note 23, at 128.
  • 143
    • 65349122954 scopus 로고    scopus 로고
    • Moss & Johnson, supra note 15, at 334
    • Moss & Johnson, supra note 15, at 334.
  • 144
    • 65349112462 scopus 로고    scopus 로고
    • Bird et al, supra note 23, at 128
    • Bird et al., supra note 23, at 128.
  • 145
    • 65349157677 scopus 로고    scopus 로고
    • The interquartile ranges show a similar result. For participants who had used fringe borrowing, the age range from the twenty-fifth percentile to the seventy-fifth percentile was thirty-five to forty-nine, whereas it was thirty-eight to fifty-one for those who had not
    • The interquartile ranges show a similar result. For participants who had used fringe borrowing, the age range from the twenty-fifth percentile to the seventy-fifth percentile was thirty-five to forty-nine, whereas it was thirty-eight to fifty-one for those who had not.
  • 146
    • 65349083751 scopus 로고    scopus 로고
    • The interquartile range for participants who were still using fringe borrowing was twenty-seven to forty years old, compared with the one of thirty-nine to fifty years old for those who were not
    • The interquartile range for participants who were still using fringe borrowing was twenty-seven to forty years old, compared with the one of thirty-nine to fifty years old for those who were not.
  • 147
    • 65349168385 scopus 로고    scopus 로고
    • at
    • Bird et al., supra note 23, at 126.
    • supra note , vol.23 , pp. 126
    • Bird1
  • 148
    • 65349103965 scopus 로고    scopus 로고
    • See infra Part IV.C.2.
    • See infra Part IV.C.2.
  • 149
    • 65349162148 scopus 로고    scopus 로고
    • The fact that the fringe sectors have experienced marked growth as credit card debt has exploded, however, tends generally to undermine the substitution hypothesis. If borrowers have been supporting growth in both sectors over the past few decades, then the overarching trend could not have been one of substituting away from older fringe products towards the newly available credit cards
    • The fact that the fringe sectors have experienced marked growth as credit card debt has exploded, however, tends generally to undermine the substitution hypothesis. If borrowers have been supporting growth in both sectors over the past few decades, then the overarching trend could not have been one of substituting away from older fringe products towards the newly available credit cards.
  • 150
    • 65349182395 scopus 로고    scopus 로고
    • This makes a total of 50% of all participants who still hold a useable credit card
    • This makes a total of 50% of all participants who still hold a useable credit card.
  • 151
    • 65349130621 scopus 로고    scopus 로고
    • See, e.g, Zywicki, supra note 6, at 96
    • See, e.g., Zywicki, supra note 6, at 96.
  • 152
    • 65349137575 scopus 로고    scopus 로고
    • In a study conducted in 1974, before credit cards became widely available to low-income borrowers, the researchers stated that one of the primary reasons rationed consumers could not obtain their preferred amount of credit is that they could not afford the required monthly payments. Orville C. Walker, Jr. & Richard F. Sauter, Consumer Preferences for Alternative Retail Credit Terms: A Concept Test of the Effects of Consumer Legislation, 11 J. MARKETING RES. 70, 71 1974
    • In a study conducted in 1974, before credit cards became widely available to low-income borrowers, the researchers stated that one of the primary reasons "rationed" consumers could not obtain their preferred amount of credit is that they could not afford the required monthly payments. Orville C. Walker, Jr. & Richard F. Sauter, Consumer Preferences for Alternative Retail Credit Terms: A Concept Test of the Effects of Consumer Legislation, 11 J. MARKETING RES. 70, 71 (1974).
  • 153
    • 65349175886 scopus 로고    scopus 로고
    • I had credit reports or credit card statements for twenty-two of these participants. I relied on oral reports for the other eleven
    • I had credit reports or credit card statements for twenty-two of these participants. I relied on oral reports for the other eleven.
  • 154
    • 84868926176 scopus 로고    scopus 로고
    • The mean monthly income of all participants was $1,195 ($14,340 annually), and the median was $770 ($9,240 annually).
    • The mean monthly income of all participants was $1,195 ($14,340 annually), and the median was $770 ($9,240 annually).
  • 155
    • 84868926177 scopus 로고    scopus 로고
    • Because no participants had records of their transactions with pawn shops, rent-to-own stores, or catalogs, the data here are incomplete. Only five participants provided remembered estimates of their pawn shop loans, and those ranged from $50 to $500 before interest, with the majority falling under $200. Two participants reported rent-to-own loans totaling $700 to $900. Two participants reported catalog loans of $300 to $800, and two others described monthly payments of $3 to $15.
    • Because no participants had records of their transactions with pawn shops, rent-to-own stores, or catalogs, the data here are incomplete. Only five participants provided remembered estimates of their pawn shop loans, and those ranged from $50 to $500 before interest, with the majority falling under $200. Two participants reported rent-to-own loans totaling $700 to $900. Two participants reported catalog loans of $300 to $800, and two others described monthly payments of $3 to $15.
  • 156
    • 65349178970 scopus 로고    scopus 로고
    • Mann and Hawkins make an analogous argument with respect to payday lending. Mann & Hawkins, supra note 86, at 887-94.
    • Mann and Hawkins make an analogous argument with respect to payday lending. Mann & Hawkins, supra note 86, at 887-94.
  • 157
    • 0000415392 scopus 로고
    • Credit Cards as Spending Facilitating Stimuli: A Conditioning Interpretation, 13
    • Richard A. Feinberg, Credit Cards as Spending Facilitating Stimuli: A Conditioning Interpretation, 13 J. CONSUMER RES. 348, 354-55 (1986).
    • (1986) J. CONSUMER RES , vol.348 , pp. 354-355
    • Feinberg, R.A.1
  • 159
    • 65349176475 scopus 로고    scopus 로고
    • Id.;
    • Id.;
  • 160
    • 0005536474 scopus 로고    scopus 로고
    • Always Leave Home Without It: A Further Investigation of the Credit-Card Effect on Willingness to Pay, 12
    • Drazen Prelec & Duncan Simester, Always Leave Home Without It: A Further Investigation of the Credit-Card Effect on Willingness to Pay, 12 MARKETING LETTERS 5, 6 (2001).
    • (2001) MARKETING LETTERS , vol.5 , pp. 6
    • Prelec, D.1    Simester, D.2
  • 161
    • 84925130854 scopus 로고    scopus 로고
    • Ronald Mann provides a detailed discussion of this research in Charging Ahead, where he points out that these results have not been fully replicable. RONALD J. MANN, CHARGING AHEAD: THE GROWTH AND REGULATION OF PAYMENT CARD MARKETS 47-48 (2006).
    • Ronald Mann provides a detailed discussion of this research in Charging Ahead, where he points out that these results have not been fully replicable. RONALD J. MANN, CHARGING AHEAD: THE GROWTH AND REGULATION OF PAYMENT CARD MARKETS 47-48 (2006).
  • 162
    • 65349193837 scopus 로고    scopus 로고
    • Feinberg, supra note 125, at 350, 352-53
    • Feinberg, supra note 125, at 350, 352-53.
  • 163
    • 65349156895 scopus 로고    scopus 로고
    • Id. at 353-54
    • Id. at 353-54.
  • 164
    • 65349149384 scopus 로고    scopus 로고
    • For a detailed discussion of these findings, see Littwin, supra note 20, at 466-78
    • For a detailed discussion of these findings, see Littwin, supra note 20, at 466-78.
  • 165
    • 65349160863 scopus 로고    scopus 로고
    • CASKEY, supra note 16
    • CASKEY, supra note 16.
  • 166
    • 84888467546 scopus 로고    scopus 로고
    • note 155;
    • See infra note 155;
    • See infra
  • 167
    • 65349090663 scopus 로고    scopus 로고
    • see also Gregory Elliehausen & Edward C. Lawrence, Payday Advance Credit in America: An Analysis of Customer Demand 23 (Credit Research Ctr., Monograph No. 35, Apr. 2001), available at http://www.business.gwu.edu/research/centers/fsrp/pdf/Mono35.pdf (The standard economic analysis of consumer behavior focuses on the outcome of decisions.).
    • see also Gregory Elliehausen & Edward C. Lawrence, Payday Advance Credit in America: An Analysis of Customer Demand 23 (Credit Research Ctr., Monograph No. 35, Apr. 2001), available at http://www.business.gwu.edu/research/centers/fsrp/pdf/Mono35.pdf ("The standard economic analysis of consumer behavior focuses on the outcome of decisions.").
  • 168
    • 65349124731 scopus 로고    scopus 로고
    • DAVID S. EVANS & RICHARD SCHMALENSEE, PAYING WITH PLASTIC: THE DIGITAL REVOLUTION IN BUYING AND BORROWING 53-61 (2d ed. 2005);
    • DAVID S. EVANS & RICHARD SCHMALENSEE, PAYING WITH PLASTIC: THE DIGITAL REVOLUTION IN BUYING AND BORROWING 53-61 (2d ed. 2005);
  • 169
    • 65349179608 scopus 로고    scopus 로고
    • MANN, supra note 129, at 81-85
    • MANN, supra note 129, at 81-85.
  • 170
    • 65349134132 scopus 로고    scopus 로고
    • See, e.g., EVANS & SCHMALENSEE, supra note 133, at 186 (recounting American Express's image of exclusivity and advertising slogan, Membership Has Its Privileges).
    • See, e.g., EVANS & SCHMALENSEE, supra note 133, at 186 (recounting American Express's image of exclusivity and advertising slogan, "Membership Has Its Privileges").
  • 171
    • 65349095154 scopus 로고    scopus 로고
    • Bird et al, supra note 23, at 126;
    • Bird et al., supra note 23, at 126;
  • 172
    • 65349099348 scopus 로고    scopus 로고
    • MOSS & Johnson, supra note 15, at 325
    • MOSS & Johnson, supra note 15, at 325.
  • 173
    • 65349172383 scopus 로고    scopus 로고
    • Littwin, supra note 20, at 465
    • Littwin, supra note 20, at 465.
  • 174
    • 65349187046 scopus 로고    scopus 로고
    • CASKEY, supra note 16, at 1;
    • CASKEY, supra note 16, at 1;
  • 175
    • 65349093929 scopus 로고    scopus 로고
    • Littwin, supra note 20, at 456
    • Littwin, supra note 20, at 456.
  • 176
    • 65349111846 scopus 로고    scopus 로고
    • Barr, supra note 16, at 141
    • Barr, supra note 16, at 141.
  • 177
    • 65349118146 scopus 로고    scopus 로고
    • See, e.g, Mann & Hawkins, supra note 86, at 891-93
    • See, e.g., Mann & Hawkins, supra note 86, at 891-93.
  • 178
    • 65349103546 scopus 로고    scopus 로고
    • Littwin, supra note 20, at 462 n.33.
    • Littwin, supra note 20, at 462 n.33.
  • 179
    • 65349168881 scopus 로고    scopus 로고
    • Fringe borrowing customers tend to have lower incomes than academic writers. See infra Part III.C.1.
    • Fringe borrowing customers tend to have lower incomes than academic writers. See infra Part III.C.1.
  • 180
    • 65349104539 scopus 로고    scopus 로고
    • By 1998, 95% of households in the highest-income quintile held bank-issued credit cards, and 86% of households in the second-highest quintile had them. Durkin, supra note 47, at 626 tbl.2.
    • By 1998, 95% of households in the highest-income quintile held bank-issued credit cards, and 86% of households in the second-highest quintile had them. Durkin, supra note 47, at 626 tbl.2.
  • 181
    • 65349172990 scopus 로고    scopus 로고
    • Charging Ahead, Ronald Mann describes his experiences presenting his research to groups of legal and financial professionals, many of whom believe that they have outsmarted their issuers by receiving more benefits from their credit cards than they pay for. MANN, supra note 127, at 128. Mann argues that most of them are mistaken
    • In Charging Ahead, Ronald Mann describes his experiences presenting his research to groups of legal and financial professionals, many of whom believe that they have outsmarted their issuers by receiving more benefits from their credit cards than they pay for. MANN, supra note 127, at 128. Mann argues that most of them are mistaken. Id.
    • Id
    • In1
  • 182
    • 33645301569 scopus 로고    scopus 로고
    • however, tend to charge annual fees for cards with rewards programs. Ronald Mann, "Contracting" for Credit, 104
    • Issuers, however, tend to charge annual fees for cards with rewards programs. Ronald Mann, "Contracting" for Credit, 104 MICH. L. REV. 899, 914 (2006).
    • (2006) MICH. L. REV , vol.899 , pp. 914
    • Issuers1
  • 183
    • 65349178186 scopus 로고    scopus 로고
    • See MANN, supra note 127, at 138 (referring to these two groups as convenience users and borrowers);
    • See MANN, supra note 127, at 138 (referring to these two groups as "convenience users" and "borrowers");
  • 184
    • 65349153061 scopus 로고    scopus 로고
    • Adam J. Levitin, The Antitrust Superbowl: America's Payment Systems, No-Surcharge Rules, and the Hidden Costs of Credit, 3 BERKELEY BUS. L.J. 265, 317-18 (2005) (although Levitin mockingly refers to transactors as deadbeats because they generate less revenue for issuers);
    • Adam J. Levitin, The Antitrust Superbowl: America's Payment Systems, No-Surcharge Rules, and the Hidden Costs of Credit, 3 BERKELEY BUS. L.J. 265, 317-18 (2005) (although Levitin mockingly refers to "transactors" as "deadbeats" because they generate less revenue for issuers);
  • 185
    • 65349144863 scopus 로고    scopus 로고
    • Zywicki, supra note 6, at 101 (using the terms convenience users and revolvers).
    • Zywicki, supra note 6, at 101 (using the terms "convenience users" and "revolvers").
  • 186
    • 65349186454 scopus 로고    scopus 로고
    • Interview with Respondent ABB
    • Interview with Respondent ABB.
  • 187
    • 65349126399 scopus 로고    scopus 로고
    • Durkin, supra note 47, at 626 tbl.2. This trend remained consistent as between each income quintile from at least 1970 through 1998. Unfortunately, the author did not indicate whether these differences between income quintiles were statistically significant.
    • Durkin, supra note 47, at 626 tbl.2. This trend remained consistent as between each income quintile from at least 1970 through 1998. Unfortunately, the author did not indicate whether these differences between income quintiles were statistically significant.
  • 188
    • 65349100546 scopus 로고    scopus 로고
    • Bucks et al., supra note 34, at A35 tbl.14. This trend remained stable from at least 1995 through 2004, although the authors did not indicate statistical significance.
    • Bucks et al., supra note 34, at A35 tbl.14. This trend remained stable from at least 1995 through 2004, although the authors did not indicate statistical significance.
  • 189
    • 34249085148 scopus 로고    scopus 로고
    • at tbl.8 showing that homeownership increases with income
    • See, e.g., id. at A22 tbl.8 (showing that homeownership increases with income).
    • See, e.g., id
  • 190
    • 65349180786 scopus 로고    scopus 로고
    • Duleep Delpechitre & Sharon A. DeVaney, Credit Card Use Among White, African American and Hispanic Households, 52 CONSUMER INTERESTS ANN. 466 (2006).
    • Duleep Delpechitre & Sharon A. DeVaney, Credit Card Use Among White, African American and Hispanic Households, 52 CONSUMER INTERESTS ANN. 466 (2006).
  • 191
    • 65349149986 scopus 로고    scopus 로고
    • MANN, supra note 127, at 138-39 (arguing that this type of cross-subsidization is less likely to exist now than in the past because issuers have become more sophisticated about segmenting the market);
    • MANN, supra note 127, at 138-39 (arguing that this type of cross-subsidization is less likely to exist now than in the past because issuers have become more sophisticated about segmenting the market);
  • 192
    • 43049133522 scopus 로고    scopus 로고
    • note 145, at, citing ambiguity in the literature about whether transactors' credit card use is subsidized by the interest paid by revolvers
    • Levitin, supra note 145, at 317-18 (citing ambiguity in the literature about whether transactors' credit card use is subsidized by the interest paid by revolvers).
    • supra , pp. 317-318
    • Levitin1
  • 193
    • 0001769093 scopus 로고
    • A Note on the Pure Theory of Consumer's Behavior, 5
    • P.A. Samuelson, A Note on the Pure Theory of Consumer's Behavior, 5 ECONOMICA 61 (1938).
    • (1938) ECONOMICA , vol.61
    • Samuelson, P.A.1
  • 194
    • 65349141213 scopus 로고    scopus 로고
    • Id
    • Id.
  • 195
    • 65349084360 scopus 로고    scopus 로고
    • This latter result was not supported by the current study
    • This latter result was not supported by the current study.
  • 196
    • 65349163344 scopus 로고    scopus 로고
    • In addition, behavioral data is considered a more objective lens into people's preferences than subjective data, and it also avoids participant reliability problems. For example, participants may have faulty memories or give answers that present their behavior in a positive light. See Walker & Sauter, supra note 120, at 72 (Since stated preferences may be more 'rational,' or in other ways different from actual behavior, the results of this type of analysis should be evaluated with caution.).
    • In addition, behavioral data is considered a more objective lens into people's preferences than subjective data, and it also avoids participant reliability problems. For example, participants may have faulty memories or give answers that present their behavior in a positive light. See Walker & Sauter, supra note 120, at 72 ("Since stated preferences may be more 'rational,' or in other ways different from actual behavior, the results of this type of analysis should be evaluated with caution.").
  • 197
    • 8644277076 scopus 로고    scopus 로고
    • Seduction by Plastic, 98
    • discussing how credit card borrowing can lead to preference reversal, See generally
    • See generally Oren Bar-Gill, Seduction by Plastic, 98 NW. U. L. REV. 1373 (2004) (discussing how credit card borrowing can lead to preference reversal).
    • (2004) NW. U. L. REV , vol.1373
    • Bar-Gill, O.1
  • 198
    • 0041109884 scopus 로고    scopus 로고
    • Time Discounting and Time Preference: A Critical Review, 40
    • See
    • See Shane Frederick et al., Time Discounting and Time Preference: A Critical Review, 40 J. ECON. LITERATURE 351 (2002);
    • (2002) J. ECON. LITERATURE , vol.351
    • Frederick, S.1
  • 199
    • 0038969032 scopus 로고    scopus 로고
    • Golden Eggs and Hyperbolic Discounting, 112
    • David Laibson, Golden Eggs and Hyperbolic Discounting, 112 Q.J. ECON. 443 (1997);
    • (1997) Q.J. ECON , vol.443
    • Laibson, D.1
  • 200
    • 0038957677 scopus 로고    scopus 로고
    • Littwin, supra note 20, at 467 (citing Ted O'Donoghue & Matthew Rabin, Doing It Now or Later, 89 AM. ECON. REV. 103 (1999)).
    • Littwin, supra note 20, at 467 (citing Ted O'Donoghue & Matthew Rabin, Doing It Now or Later, 89 AM. ECON. REV. 103 (1999)).
  • 201
    • 65349109784 scopus 로고    scopus 로고
    • Littwin, supra note 20, at 466-67
    • Littwin, supra note 20, at 466-67.
  • 202
    • 65349186472 scopus 로고    scopus 로고
    • Walker & Sauter, supra note 120, at 70-71
    • Walker & Sauter, supra note 120, at 70-71.
  • 203
    • 65349188919 scopus 로고    scopus 로고
    • This study was conducted in 1971, before the federal preemption of state usury laws was recognized in 1978. See discussion supra note 85
    • This study was conducted in 1971, before the federal preemption of state usury laws was recognized in 1978. See discussion supra note 85.
  • 204
    • 65349101162 scopus 로고    scopus 로고
    • Therefore, the Minnesota usury law in question would have an impact on consumer credit transactions. The statute's focus on consumer retail credit is also indicative of the time in that credit cards were not yet widely available. See, e.g., Moss & Johnson, supra note 15, at 325-26.
    • Therefore, the Minnesota usury law in question would have an impact on consumer credit transactions. The statute's focus on consumer retail credit is also indicative of the time in that credit cards were not yet widely available. See, e.g., Moss & Johnson, supra note 15, at 325-26.
  • 205
    • 84876964715 scopus 로고    scopus 로고
    • note 120, at fig.1
    • Walker & Sauter, supra note 120, at 74 fig.1.
    • supra , pp. 74
    • Walker1    Sauter2
  • 206
    • 65349102945 scopus 로고    scopus 로고
    • Id
    • Id.
  • 208
    • 65349192801 scopus 로고    scopus 로고
    • In August 2006, the senior staff of the Credit Research Center moved from Georgetown University's McDonough School of Business to establish the Financial Services Research Program at George Washington University School of Business
    • In August 2006, the senior staff of the Credit Research Center moved from Georgetown University's McDonough School of Business to establish the Financial Services Research Program at George Washington University School of Business.
  • 209
    • 65349174496 scopus 로고    scopus 로고
    • Reported in Durkin, supra note 47, at 627-33
    • Reported in Durkin, supra note 47, at 627-33.
  • 210
    • 84868928419 scopus 로고    scopus 로고
    • The fact that an institute that, at least as of 1998, was largely funded and partially governed by the credit industry produced such a study is an implicit acknowledgement by market participants of the importance of studying subjective preferences. See Robert Cwiklik, Ivory Tower Inc.: When Research and Lobbying Mesh, WALL ST. J., June 9, 1998, at B1 (stating that the Credit Research Center's 1998, $450,000 budget was largely funded by the credit industry and that 70% of its advisory counsel members were industry representatives);
    • The fact that an institute that, at least as of 1998, was largely funded and partially governed by the credit industry produced such a study is an implicit acknowledgement by market participants of the importance of studying subjective preferences. See Robert Cwiklik, Ivory Tower Inc.: When Research and Lobbying Mesh, WALL ST. J., June 9, 1998, at B1 (stating that the Credit Research Center's 1998, $450,000 budget was largely funded by the credit industry and that 70% of its advisory counsel members were industry representatives);
  • 211
    • 0036014235 scopus 로고    scopus 로고
    • see also Elizabeth Warren, The Market for Data: The Changing Role of Social Sciences in Shaping the Law, 2002 WIS. L. REV. 1 ,8, 11-15.
    • see also Elizabeth Warren, The Market for Data: The Changing Role of Social Sciences in Shaping the Law, 2002 WIS. L. REV. 1 ,8, 11-15.
  • 212
    • 65349171504 scopus 로고    scopus 로고
    • Durkin, supra note 47, at 627
    • Durkin, supra note 47, at 627.
  • 213
    • 65349175654 scopus 로고    scopus 로고
    • Id. at 627 tbl.3. That left only 17% of all families and 15% of bank card holding families who thought that credit card use was good, with qualification, bad, with qualification, or both good and bad. Id. The current study found analogous polarization of opinion about credit cards. I interpret this finding in Part IV.B, infra.
    • Id. at 627 tbl.3. That left only 17% of all families and 15% of
  • 214
    • 65349093945 scopus 로고    scopus 로고
    • Durkin, supra note 47, at 627
    • Durkin, supra note 47, at 627.
  • 215
    • 65349118163 scopus 로고    scopus 로고
    • Id. at 628
    • Id. at 628.
  • 216
    • 65349139459 scopus 로고    scopus 로고
    • Id. at 629 tbl.4.
    • Id. at 629 tbl.4.
  • 217
    • 65349102946 scopus 로고    scopus 로고
    • at
    • Id. at 628, 630.
  • 218
    • 65349101163 scopus 로고    scopus 로고
    • This is why, for example, when the current study asked about use of loan sharks, it asked whether participants had ever used loan sharks themselves and also whether they knew of anyone who had used them. See discussion infra Part IV.C.3
    • This is why, for example, when the current study asked about use of loan sharks, it asked whether participants had ever used loan sharks themselves and also whether they knew of anyone who had used them. See discussion infra Part IV.C.3.
  • 219
    • 65349155754 scopus 로고    scopus 로고
    • note 47, at tbl.4
    • Durkin, supra note 47, at 629 tbl.4.
    • supra , pp. 629
    • Durkin1
  • 220
    • 65349193835 scopus 로고    scopus 로고
    • See discussion infra Part IV.C.3.
    • See discussion infra Part IV.C.3.
  • 221
    • 65349170910 scopus 로고    scopus 로고
    • Again, payday lending is illegal in Massachusetts, which accounts for its lack of representation among the forms of borrowing participants have used. See supra note 13 and accompanying text.
    • Again, payday lending is illegal in Massachusetts, which accounts for its lack of representation among the forms of borrowing participants have used. See supra note 13 and accompanying text.
  • 222
    • 65349092809 scopus 로고    scopus 로고
    • See also LENDOL CALDER, FINANCING THE AMERICAN DREAM: A CULTURAL HISTORY OF CONSUMER CREDIT 60-64 (1999) (suggesting that credit cards replaced some borrowing from pawn shops and some from friends and family).
    • See also LENDOL CALDER, FINANCING THE AMERICAN DREAM: A CULTURAL HISTORY OF CONSUMER CREDIT 60-64 (1999) (suggesting that credit cards replaced some borrowing from pawn shops and some from friends and family).
  • 223
    • 65349107712 scopus 로고    scopus 로고
    • For other evidence, see Bird et al, supra note 23, at 126;
    • For other evidence, see Bird et al., supra note 23, at 126;
  • 224
    • 65349135353 scopus 로고    scopus 로고
    • Moss & Johnson, supra note 15, at 323-26
    • Moss & Johnson, supra note 15, at 323-26.
  • 225
    • 65349147670 scopus 로고    scopus 로고
    • See note 20, app. at
    • See Littwin, supra note 20, app. at 503.
    • supra , pp. 503
    • Littwin1
  • 226
    • 65349194994 scopus 로고    scopus 로고
    • A LexisNexis search revealed only six law review articles mentioning the mail order company, none of which discussed its lending operations. H. Beau Baez III, The Rush to the Goblin Market: The Blurring of Quill's Two Nexus Tests, 29 SEATTLE U. L. REV. 581 (2006) (discussing out-of-state retailers that do not collect sales tax);
    • A LexisNexis search revealed only six law review articles mentioning the mail order company, none of which discussed its lending operations. H. Beau Baez III, The Rush to the Goblin Market: The Blurring of Quill's Two Nexus Tests, 29 SEATTLE U. L. REV. 581 (2006) (discussing out-of-state retailers that do not collect sales tax);
  • 227
    • 65349180785 scopus 로고    scopus 로고
    • Steven J. Forte, Use Tax Collection on Internet Purchases: Should the Mail Order Industry Serve as a Model?, 15 J. MARSHALL J. COMPUTER & INFO. L. 203 (1997) (discussing Internet taxation);
    • Steven J. Forte, Use Tax Collection on Internet Purchases: Should the Mail Order Industry Serve as a Model?, 15 J. MARSHALL J. COMPUTER & INFO. L. 203 (1997) (discussing Internet taxation);
  • 228
    • 65349131235 scopus 로고    scopus 로고
    • Edward A. Morse, State Taxation of Internet Commerce: Something New Under the Sun?, 30 CREIOHTON L. REV. 1113 (1997) (same);
    • Edward A. Morse, State Taxation of Internet Commerce: Something New Under the Sun?, 30 CREIOHTON L. REV. 1113 (1997) (same);
  • 229
    • 21844523056 scopus 로고
    • Setting Standards for Fair Information Practice in the U.S. Private Sector, 80
    • discussing data privacy
    • Joel R. Reidenberg, Setting Standards for Fair Information Practice in the U.S. Private Sector, 80 IOWA L. REV. 497 (1995) (discussing data privacy);
    • (1995) IOWA L. REV , vol.497
    • Reidenberg, J.R.1
  • 230
    • 0036342242 scopus 로고    scopus 로고
    • Haste Makes Waste: Congress and the Common Law in Cyberspace, 55
    • discussing Internet jurisdiction
    • Suzanna Sherry, Haste Makes Waste: Congress and the Common Law in Cyberspace, 55 VAND. L. REV. 309 (2002) (discussing Internet jurisdiction);
    • (2002) VAND. L. REV , vol.309
    • Sherry, S.1
  • 231
    • 65349165725 scopus 로고    scopus 로고
    • Matthew G. McLaughlin, Comment, The Internet Tax Freedom Act: Congress Takes a Byte Out of the Net, 48 CATH. U. L. REV. 209 (1998) (discussing taxation of mailing lists);
    • Matthew G. McLaughlin, Comment, The Internet Tax Freedom Act: Congress Takes a Byte Out of the Net, 48 CATH. U. L. REV. 209 (1998) (discussing taxation of mailing lists);
  • 232
    • 84868926169 scopus 로고    scopus 로고
    • see also Joseph B. Cahill, Where It's Due: Credit Companies Find Tough Rival at Bottom of Consumer Market - Fingerhut's Experience Shows 'Subprime' Lending Takes Gimmicks, a Lot of Grit-A Toll on Customers, Too, WALL St. J., Dec. 29, 1998, at A1 (Little-known outside low-income groups - its customers have an average household income of $27,700 ....).
    • see also Joseph B. Cahill, Where It's Due: Credit Companies Find Tough Rival at Bottom of Consumer Market - Fingerhut's Experience Shows 'Subprime' Lending Takes Gimmicks, a Lot of Grit-A Toll on Customers, Too, WALL St. J., Dec. 29, 1998, at A1 ("Little-known outside low-income groups - its customers have an average household income of $27,700 ....").
  • 233
    • 84888467546 scopus 로고    scopus 로고
    • notes 198-215 and accompanying text
    • See infra notes 198-215 and accompanying text.
    • See infra
  • 234
    • 65349147670 scopus 로고    scopus 로고
    • See note 20, app. at
    • See Littwin, supra note 20, app. at 503.
    • supra , pp. 503
    • Littwin1
  • 235
    • 34250335723 scopus 로고    scopus 로고
    • Press Release, Ctr. for Responsible Lending, The $30 Doughnut July 11
    • See, e.g., Press Release, Ctr. for Responsible Lending, The $30 Doughnut (July 11, 2007), http://ga3.org/crl/notice-description.tcl? newsletter-id=13016480.
    • (2007) See, e.g
  • 236
    • 65349087886 scopus 로고    scopus 로고
    • Ban, supra note 16, at 123-25
    • Ban, supra note 16, at 123-25.
  • 237
    • 65349090066 scopus 로고    scopus 로고
    • See, e.g, Bird et al, supra note 23;
    • See, e.g., Bird et al., supra note 23;
  • 238
    • 65349126403 scopus 로고    scopus 로고
    • Durkin, supra note 47;
    • Durkin, supra note 47;
  • 239
    • 65349189936 scopus 로고    scopus 로고
    • Littwin, supra note 20;
    • Littwin, supra note 20;
  • 240
    • 65349151888 scopus 로고    scopus 로고
    • Walker & Sauter, supra note 120;
    • Walker & Sauter, supra note 120;
  • 241
    • 65349089453 scopus 로고    scopus 로고
    • Zywicki, supra note 6
    • Zywicki, supra note 6.
  • 242
    • 21144438737 scopus 로고    scopus 로고
    • Credit Where It Counts: The Community Reinvestment Act and Its Critics, 80
    • See, e.g
    • See, e.g., Michael S. Barr, Credit Where It Counts: The Community Reinvestment Act and Its Critics, 80 N.Y.U. L. REV. 513 (2005);
    • (2005) N.Y.U. L. REV , vol.513
    • Barr, M.S.1
  • 243
    • 65349195556 scopus 로고    scopus 로고
    • Canner et al, supra note 41;
    • Canner et al., supra note 41;
  • 244
    • 23044534232 scopus 로고    scopus 로고
    • A Tale of Three Markets: The Law and Economics of Predatory Lending, 80
    • Kathleen C. Engel & Patricia A. McCoy, A Tale of Three Markets: The Law and Economics of Predatory Lending, 80 TEX. L. REV. 1255 (2002);
    • (2002) TEX. L. REV , vol.1255
    • Engel, K.C.1    McCoy, P.A.2
  • 245
    • 65349149382 scopus 로고    scopus 로고
    • Private Mortgage Insurance, 39
    • Quintin Johnstone, Private Mortgage Insurance, 39 WAKE FOREST L. REV. 783 (2004);
    • (2004) WAKE FOREST L. REV , vol.783
    • Johnstone, Q.1
  • 246
    • 0347108023 scopus 로고
    • An Economic Analysis of Mortgagor Protection Laws, 77
    • Michael H. Schill, An Economic Analysis of Mortgagor Protection Laws, 77 VA. L. REV. 489 (1991).
    • (1991) VA. L. REV , vol.489
    • Schill, M.H.1
  • 247
    • 65349144862 scopus 로고    scopus 로고
    • JAMES M. LACKO ET AL., FED. TRADE COMM'N BUREAU OF ECON., STUDY OF RENT-TO-OWN CONSUMERS ES-2 (2000) [hereinafter FTC REPORT], available at http://www.ftc.gov/reports/ renttoown/renttoownr.pdf.
    • JAMES M. LACKO ET AL., FED. TRADE COMM'N BUREAU OF ECON., STUDY OF RENT-TO-OWN CONSUMERS ES-2 (2000) [hereinafter FTC REPORT], available at http://www.ftc.gov/reports/ renttoown/renttoownr.pdf.
  • 250
    • 0037256668 scopus 로고    scopus 로고
    • Signe-Mary McKernan et al., Empirical Evidence on the Determinants of Rent-to-Own Use and Purchase Behavior, 17 ECON. DEV. Q. 33, 34 (2003).
    • Signe-Mary McKernan et al., Empirical Evidence on the Determinants of Rent-to-Own Use and Purchase Behavior, 17 ECON. DEV. Q. 33, 34 (2003).
  • 251
    • 84990250681 scopus 로고    scopus 로고
    • CASKEY, supra note 16, at 80 (citing Roger M. Swagler & Paula Wheeler, Rental-Purchase Agreements: A Preliminary Investigation of Consumer Attitudes and Behaviors,J. CONSUMER AFF. 145, 147 (1989));
    • CASKEY, supra note 16, at 80 (citing Roger M. Swagler & Paula Wheeler, Rental-Purchase Agreements: A Preliminary Investigation of Consumer Attitudes and Behaviors,J. CONSUMER AFF. 145, 147 (1989));
  • 252
    • 65349183477 scopus 로고    scopus 로고
    • McKernan et al, supra note 187
    • McKernan et al., supra note 187.
  • 253
    • 65349119373 scopus 로고    scopus 로고
    • FTC REPORT, supra note 185, at ES-1;
    • FTC REPORT, supra note 185, at ES-1;
  • 254
    • 65349140062 scopus 로고    scopus 로고
    • McKernan et al, supra note 187
    • McKernan et al., supra note 187.
  • 255
    • 65349108056 scopus 로고    scopus 로고
    • FTC REPORT, supra note 185, at 1
    • FTC REPORT, supra note 185, at 1.
  • 256
  • 257
    • 65349175655 scopus 로고    scopus 로고
    • Despite being published over a decade ago, John Caskey's book Fringe Banking remains the definitive work on the subject. CASKEY, supra note 16.
    • Despite being published over a decade ago, John Caskey's book Fringe Banking remains the definitive work on the subject. CASKEY, supra note 16.
  • 258
    • 65349156303 scopus 로고    scopus 로고
    • In Fringe Banking, Caskey analyzed the few sources of data about pawn shops that were publicly available and collected data predominately through interviews with pawnbrokers. Id. at xiii. The only other comprehensive empirical research on pawn shops appears to be a Credit Research Center's study, published in 1998. JOHNSON & JOHNSON, supra note 91. This study consists of a nonrandom sample of 1,820 pawn shop customers. Id. at 32.
    • In Fringe Banking, Caskey analyzed the few sources of data about pawn shops that were publicly available and collected data predominately through interviews with pawnbrokers. Id. at xiii. The only other comprehensive empirical research on pawn shops appears to be a Credit Research Center's study, published in 1998. JOHNSON & JOHNSON, supra note 91. This study consists of a nonrandom sample of 1,820 pawn shop customers. Id. at 32.
  • 259
    • 65349140631 scopus 로고    scopus 로고
    • CASKEY, supra note 16, at 42
    • CASKEY, supra note 16, at 42.
  • 260
    • 65349107710 scopus 로고    scopus 로고
    • Id. at 39
    • Id. at 39
  • 261
    • 65349104796 scopus 로고    scopus 로고
    • Id. at 37
    • Id. at 37.
  • 262
    • 65349195553 scopus 로고    scopus 로고
    • Id. at 44
    • Id. at 44.
  • 263
    • 84868929655 scopus 로고    scopus 로고
    • note 91, at, Caskey finds $50 to $70
    • JOHNSON & JOHNSON, supra note 91, at 16. Caskey finds $50 to $70.
    • supra , pp. 16
    • JOHNSON1    JOHNSON2
  • 264
    • 65349141912 scopus 로고    scopus 로고
    • CASKEY, supra note 16, at 44
    • CASKEY, supra note 16, at 44.
  • 265
    • 65349103962 scopus 로고    scopus 로고
    • CASKEY, supra note 16, at 36
    • CASKEY, supra note 16, at 36.
  • 266
    • 65349140632 scopus 로고    scopus 로고
    • JOHNSON & JOHNSON, supra note 91, at 7 (reporting that the number of pawn shops increased from 6,900 in 1988 to 13,000 in 1998).
    • JOHNSON & JOHNSON, supra note 91, at 7 (reporting that the number of pawn shops increased from 6,900 in 1988 to 13,000 in 1998).
  • 267
    • 65349115948 scopus 로고    scopus 로고
    • note 82, at fig.8
    • DTI REPORT, supra note 82, at 15 fig.8.
    • supra , pp. 15
    • DTI, R.1
  • 269
    • 65349166287 scopus 로고    scopus 로고
    • The finding on race may be biased by the fact that the study focused on pawn shops in urban areas. On the other hand, in the pawn shops the researchers studied, black customers were more heavily represented among the population of active borrowers, whereas white customers were more heavily represented among those present for shopping purposes only. Id. at 43.
    • The finding on race may be biased by the fact that the study focused on pawn shops in urban areas. On the other hand, in the pawn shops the researchers studied, black customers were more heavily represented among the population of active borrowers, whereas white customers were more heavily represented among those present for shopping purposes only. Id. at 43.
  • 270
    • 65349163546 scopus 로고    scopus 로고
    • See sources cited supra note 178
    • See sources cited supra note 178.
  • 271
    • 84868929650 scopus 로고    scopus 로고
    • The only other catalog with a proprietary lending system that I have been able to locate is Popular Club. This seller adds an additional twist because it encourages customers to become club leaders, which appears to be the equivalent of being a representative for Avon or Tupperware. See Popular Club, last visited Feb. 16, 2009
    • The only other catalog with a proprietary lending system that I have been able to locate is Popular Club. This seller adds an additional twist because it encourages customers to become "club leaders," which appears to be the equivalent of being a representative for Avon or Tupperware. See Popular Club, http://www.popularclub.com (last visited Feb. 16, 2009).
  • 272
  • 273
    • 84868926161 scopus 로고    scopus 로고
    • Fingerhut, Customer Service: Fingerhut Credit, http://www.fingerhut.com/ help.aspx? question=414 (last visited Feb. 16, 2009) (showing monthly payments of $5.99 for balances between $5.99 and $44.99, $55.99 for balances between $800 and $1,099.99, and 5% of the balance for balances over $1,400).
    • Fingerhut, Customer Service: Fingerhut Credit, http://www.fingerhut.com/ help.aspx? question=414 (last visited Feb. 16, 2009) (showing monthly payments of $5.99 for balances between $5.99 and $44.99, $55.99 for balances between $800 and $1,099.99, and 5% of the balance for balances over $1,400).
  • 274
    • 65349127015 scopus 로고    scopus 로고
    • Fingerhut declined to release the number of months an installment plan typically requires. E-mail from Lisa Bilcik, Vice President, Corporate Counsel, Fingerhut, to author (Sept. 20, 2006,13:43:21 EST) (on file with author).
    • Fingerhut declined to release the number of months an installment plan typically requires. E-mail from Lisa Bilcik, Vice President, Corporate Counsel, Fingerhut, to author (Sept. 20, 2006,13:43:21 EST) (on file with author).
  • 275
    • 65349095158 scopus 로고    scopus 로고
    • But a Wall Street Journal article cites payment plan lengths of fifteen to eighteen months. Cahill, supra note 178.
    • But a Wall Street Journal article cites payment plan lengths of fifteen to eighteen months. Cahill, supra note 178.
  • 276
    • 84868932866 scopus 로고    scopus 로고
    • note 178; Fingerhut Credit Application, last visited Feb. 16
    • Cahill, supra note 178; Fingerhut Credit Application, https://www.fingerhut.com/ FingerhutCredit.aspx?ref=welcomeoffer&subref= HeaderLink (last visited Feb. 16,2009).
    • (2009) supra
    • Cahill1
  • 277
    • 65349096157 scopus 로고    scopus 로고
    • Fingerhut, Customer Service: Fingerhut Credit, http://www.fingerhut.com/ help.aspx? question=413 (last visited Feb. 17, 2009).
    • Fingerhut, Customer Service: Fingerhut Credit, http://www.fingerhut.com/ help.aspx? question=413 (last visited Feb. 17, 2009).
  • 278
    • 65349103562 scopus 로고    scopus 로고
    • Private-Label Credit Cards: Risky Business?
    • Jan. 6, at
    • Mark Del Franco, Private-Label Credit Cards: Risky Business?, CATALOG AGE, Jan. 6, 2002, at 16.
    • (2002) CATALOG AGE , pp. 16
    • Del Franco, M.1
  • 279
    • 65349156891 scopus 로고    scopus 로고
    • Cahill, supra note 178
    • Cahill, supra note 178.
  • 280
    • 65349140063 scopus 로고    scopus 로고
    • Fingerhut, http://www.fingerhut.com (last visited Jan. 9, 2009).
    • Fingerhut, http://www.fingerhut.com (last visited Jan. 9, 2009).
  • 281
    • 65349169497 scopus 로고    scopus 로고
    • Oser, supra note 204, at 9
    • Oser, supra note 204, at 9.
  • 283
    • 65349181810 scopus 로고    scopus 로고
    • A consensus emerged among industry observers that the Federated-owned Fingerhut's deviation from its installment credit model was a major factor in its near-collapse. A catalog industry trade publication argued that Fingerhut's problems began in 1999 because it shifted from installment payment plans to revolving credit plans. Paul Miller, Fingerhut Fixing Credit Mess, CATALOG AGE, Mar. 1, 2001, at 5.
    • A consensus emerged among industry observers that the Federated-owned Fingerhut's deviation from its installment credit model was a major factor in its near-collapse. A catalog industry trade publication argued that Fingerhut's problems began in 1999 because it shifted from installment payment plans to revolving credit plans. Paul Miller, Fingerhut Fixing Credit Mess, CATALOG AGE, Mar. 1, 2001, at 5.
  • 284
    • 84868926162 scopus 로고    scopus 로고
    • In the first year of this switch, Fingerhut lost nearly $400 million in unpaid credit bills. Id. As an industry analyst explained, the company's executives 'assumed that the customer would behave the same under both [credit] methods, But they were wrong, and their mistake was to roll out the program before properly testing it, Id
    • In the first year of this switch, Fingerhut lost nearly $400 million in unpaid credit bills. Id. As an industry analyst explained, the company's executives "'assumed that the customer would behave the same under both [credit] methods.... But they were wrong, and their mistake was to roll out the program before properly testing it.'" Id.
  • 286
    • 65349180203 scopus 로고    scopus 로고
    • Cahill, supra note 178
    • Cahill, supra note 178.
  • 287
    • 65349195554 scopus 로고    scopus 로고
    • Petters later bought out Ted Deikel's share. Vicki M. Young, Fingerhut Returns: Focus on Growth, WWD, Apr. 22, 2003, at 22.
    • Petters later bought out Ted Deikel's share. Vicki M. Young, Fingerhut Returns: Focus on Growth, WWD, Apr. 22, 2003, at 22.
  • 288
    • 84868913602 scopus 로고    scopus 로고
    • At its peak, Fingerhut had 10,000 employees, but was down to 200 in 2003. Oser, supra note 204, at 9. As of 2005, the company had sales of $175 million and more than 400 full-time employees. St. Anthony, supra note 212
    • At its peak, Fingerhut had 10,000 employees, but was down to 200 in 2003. Oser, supra note 204, at 9. As of 2005, the company had sales of $175 million and more than 400 full-time employees. St. Anthony, supra note 212.
  • 289
    • 65349177742 scopus 로고    scopus 로고
    • Oser, supra note 204, at 9
    • Oser, supra note 204, at 9.
  • 290
    • 65349097362 scopus 로고    scopus 로고
    • note 82, at fig.ll
    • DTI REPORT, supra note 82, at 18 fig.ll.
    • supra , pp. 18
    • DTI, R.1
  • 291
    • 65349189934 scopus 로고    scopus 로고
    • note 82, at chart 10b
    • ECONOMIC AND SOCIAL RISKS, supra note 82, at 31 chart 10b.
    • supra , pp. 31
    • AND, E.1    RISKS, S.2
  • 292
    • 65349101166 scopus 로고    scopus 로고
    • See supra Part III.A.
    • See supra Part III.A.
  • 293
    • 65349125325 scopus 로고    scopus 로고
    • Because I am comparing forms of borrowing, this discussion is limited to the borrowing capacity of each option discussed. For pawn shops, that means that I included only data relevant to the scenario where a person uses an item as collateral for a loan, not when she sells the item outright. Similarly, I include only data related to revolving credit card use, as opposed to transactional use. Transactional use does not seem to be a priority for this population, as only one participant who used credit cards had never regularly revolved a balance. See supra note 146.
    • Because I am comparing forms of borrowing, this discussion is limited to the borrowing capacity of each option discussed. For pawn shops, that means that I included only data relevant to the scenario where a person uses an item as collateral for a loan, not when she sells the item outright. Similarly, I include only data related to revolving credit card use, as opposed to transactional use. Transactional use does not seem to be a priority for this population, as only one participant who used credit cards had never regularly revolved a balance. See supra note 146.
  • 294
    • 65349154541 scopus 로고    scopus 로고
    • Because several participants grouped their rankings in a way that made them impossible to code accurately e.g, they're all bad, the sample size here is small. An additional number of participants gave answers such as, Pawn shops are good, and the rest are bad, so I analyzed the ranking data twice, once coding these answers as ties and once dropping them from the analysis. The two analyses produced analogous results. For the sake of simplicity, I report only one analysis. I chose the one that excluded the ties because the data was more precise. When a participant said the rest are bad, I did not collect data on exactly which borrowing type she was including
    • Because several participants grouped their rankings in a way that made them impossible to code accurately (e.g., "they're all bad"), the sample size here is small. An additional number of participants gave answers such as, "Pawn shops are good, and the rest are bad," so I analyzed the ranking data twice, once coding these answers as ties and once dropping them from the analysis. The two analyses produced analogous results. For the sake of simplicity, I report only one analysis. I chose the one that excluded the ties because the data was more precise. When a participant said "the rest are bad," I did not collect data on exactly which borrowing type she was including.
  • 295
    • 65349132969 scopus 로고    scopus 로고
    • All of the negative rankings for middle-class borrowing were of bank overdraft protection. Car loans, student loans, loans from credit unions, and personal lines of credit from banks never received negative rankings
    • All of the negative rankings for middle-class borrowing were of bank overdraft protection. Car loans, student loans, loans from credit unions, and personal lines of credit from banks never received negative rankings.
  • 296
    • 84868928404 scopus 로고    scopus 로고
    • See, e.g., HERVÉ MOULIN, COOPERATIVE MICROECONOMICS: A GAME-THEORETIC INTRODUCTION 7 (1995) ([T]here is the concern that a well-intentioned politician who invokes ethical principles to interfere with the market process ... is likely to be countereffective....[I]Ilegal usury is more expensive because the borrower must pay a premium to insure the lender against the risk of being caught....);
    • See, e.g., HERVÉ MOULIN, COOPERATIVE MICROECONOMICS: A GAME-THEORETIC INTRODUCTION 7 (1995) ("[T]here is the concern that a well-intentioned politician who invokes ethical principles to interfere with the market process ... is likely to be countereffective....[I]Ilegal usury is more expensive because the borrower must pay a premium to insure the lender against the risk of being caught....");
  • 297
    • 65349152481 scopus 로고    scopus 로고
    • David A. Skeel, Jr., Racial Dimensions of Credit and Bankruptcy, 61 WASH. & LEE L. REV. 1695, 1723 (2004) (Faced with restrictive usury rules, lenders can be expected to cut back on credit. This could have the effect of steering marginal borrowers who need credit toward much less attractive forms of credit, such as pawnshops or even loan sharks.);
    • David A. Skeel, Jr., Racial Dimensions of Credit and Bankruptcy, 61 WASH. & LEE L. REV. 1695, 1723 (2004) ("Faced with restrictive usury rules, lenders can be expected to cut back on credit. This could have the effect of steering marginal borrowers who need credit toward much less attractive forms of credit, such as pawnshops or even loan sharks.");
  • 298
    • 65349180784 scopus 로고    scopus 로고
    • Therese Wilson, The Inadequacy of the Current Regulatory Response to Payday Lending, 32 AUSTL. BUS. L. REV. 193, 199 (2004) (citing Press Release, Austl. Office of Fair Trading, Payday Predators Panned (Aug. 31, 2000)).
    • Therese Wilson, The Inadequacy of the Current Regulatory Response to Payday Lending, 32 AUSTL. BUS. L. REV. 193, 199 (2004) (citing Press Release, Austl. Office of Fair Trading, Payday Predators Panned (Aug. 31, 2000)).
  • 299
    • 65349111268 scopus 로고    scopus 로고
    • Christopher L. Peterson, Truth, Understanding, and High-Cost Consumer Credit: The Historical Context of the Truth in Lending Act, 55 FLA. L. REV. 807, 861-63 (2003).
    • Christopher L. Peterson, Truth, Understanding, and High-Cost Consumer Credit: The Historical Context of the Truth in Lending Act, 55 FLA. L. REV. 807, 861-63 (2003).
  • 300
    • 65349166289 scopus 로고    scopus 로고
    • On the other hand, the relationship between legal and illegal credit may be symbiotic. Credit historian Lendol Calder argues that the rise of loan sharking in the late nineteenth century mirrored the rise of retail credit, as many of those who fell behind on their retail installment debts would turn to loan sharking. CALDER, supra note 175, at 55.
    • On the other hand, the relationship between legal and illegal credit may be symbiotic. Credit historian Lendol Calder argues that the rise of loan sharking in the late nineteenth century mirrored the rise of retail credit, as many of those who fell behind on their retail installment debts would turn to loan sharking. CALDER, supra note 175, at 55.
  • 301
    • 84963456897 scopus 로고    scopus 로고
    • notes 120-23 and accompanying text
    • See supra notes 120-23 and accompanying text.
    • See supra
  • 302
    • 65349099947 scopus 로고    scopus 로고
    • In Some Immigrant Enclaves, Loan Shark Is the Local Bank
    • describing loans made by illegal lenders to immigrant small businesses, Apr. 23, at
    • Dexter Filkins, In Some Immigrant Enclaves, Loan Shark Is the Local Bank, N.Y. TIMES, Apr. 23, 2001, at A1 (describing loans made by illegal lenders to immigrant small businesses).
    • (2001) N.Y. TIMES
    • Filkins, D.1
  • 303
    • 65349161512 scopus 로고    scopus 로고
    • Joseph Kelly, Caught in the Intersection Between Public Policy and Practicality: A Survey of the Legal Treatment of Gambling-Related Obligations in the United States, 5 CHAP. L. REV. 87, 141 (2002) (describing informal lenders in Quebec casinos who lend casino chips instead of cash, execute their transactions in casino restrooms, and charge rates as high as 10% per day);
    • Joseph Kelly, Caught in the Intersection Between Public Policy and Practicality: A Survey of the Legal Treatment of Gambling-Related Obligations in the United States, 5 CHAP. L. REV. 87, 141 (2002) (describing informal lenders in Quebec casinos who lend casino chips instead of cash, execute their transactions in casino restrooms, and charge rates as high as 10% per day);
  • 304
    • 65349171505 scopus 로고    scopus 로고
    • A Losing Hand
    • stating that problem gamblers may turn to loan sharks and describing the breakup of a loan-sharking ring at the Foxwoods Casino in Connecticut, May 8, at
    • Jeff Benedict, A Losing Hand, HARTFORD COURANT, May 8, 2005, at C1 (stating that problem gamblers may turn to loan sharks and describing the breakup of a loan-sharking ring at the Foxwoods Casino in Connecticut).
    • (2005) HARTFORD COURANT
    • Benedict, J.1
  • 305
    • 65349177121 scopus 로고    scopus 로고
    • CALDER, supra note 175, at 52 (Loan sharks catered to a class of borrowers that overlapped the high end of the pawnbroker's clientele.).
    • CALDER, supra note 175, at 52 ("Loan sharks catered to a class of borrowers that overlapped the high end of the pawnbroker's clientele.").
  • 306
    • 65349119957 scopus 로고    scopus 로고
    • See discussion supra Part III.B.
    • See discussion supra Part III.B.
  • 307
    • 65349149987 scopus 로고    scopus 로고
    • See supra Part III.B fig.3.
    • See supra Part III.B fig.3.
  • 308
    • 65349177119 scopus 로고    scopus 로고
    • For a detailed discussion of this finding, see Littwin, supra note 20, at 496
    • For a detailed discussion of this finding, see Littwin, supra note 20, at 496.
  • 309
    • 65349175097 scopus 로고    scopus 로고
    • See MANN, supra note 126, at 193-95
    • See MANN, supra note 126, at 193-95.
  • 310
    • 84868913596 scopus 로고    scopus 로고
    • The 2005 Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCA) included a weak minimum-balance disclosure requirement. See 15 U.S.C. § 1637(b) (2006).
    • The 2005 Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCA) included a weak minimum-balance disclosure requirement. See 15 U.S.C. § 1637(b) (2006).
  • 311
    • 65349104552 scopus 로고    scopus 로고
    • For a discussion of the ineffectiveness of this provision, see MANN, supra note 126, at 161
    • For a discussion of the ineffectiveness of this provision, see MANN, supra note 126, at 161.
  • 312
    • 65349172386 scopus 로고    scopus 로고
    • In 2002, California passed a stronger disclosure requirement. Julia Lane, Will Credit Cardholders Default over Minimum Payment Hikes, 18 LOY. CONSUMER L. REV. 331, 344 2006
    • In 2002, California passed a stronger disclosure requirement. Julia Lane, Will Credit Cardholders Default over Minimum Payment Hikes?, 18 LOY. CONSUMER L. REV. 331, 344 (2006).
  • 313
    • 65349167816 scopus 로고    scopus 로고
    • Card issuers challenged the bill in court and won on the grounds that it was preempted by federal banking laws such as the National Bank Act. See, e.g, id
    • Card issuers challenged the bill in court and won on the grounds that it was preempted by federal banking laws such as the National Bank Act. See, e.g., id.
  • 314
    • 65349133571 scopus 로고    scopus 로고
    • Redacted participant credit card bills on file with author
    • Redacted participant credit card bills (on file with author).
  • 315
    • 65349168384 scopus 로고    scopus 로고
    • See Littwin, supra note 20, at Part IV.
    • See Littwin, supra note 20, at Part IV.
  • 316
    • 65349152487 scopus 로고    scopus 로고
    • Interview with Respondent V22
    • Interview with Respondent V22.
  • 317
    • 65349102949 scopus 로고    scopus 로고
    • Interview with Respondent 99Z
    • Interview with Respondent 99Z.
  • 318
    • 65349118787 scopus 로고    scopus 로고
    • Interview with Respondent 803
    • Interview with Respondent 803.
  • 319
    • 65349185487 scopus 로고    scopus 로고
    • As part of its human subjects protections, the study developed a list of resources where participants could seek help with debt issues. When a participant asked for bankruptcy advice, she was given this list and referred to those resources that offered bankruptcy services
    • As part of its human subjects protections, the study developed a list of resources where participants could seek help with debt issues. When a participant asked for bankruptcy advice, she was given this list and referred to those resources that offered bankruptcy services.
  • 320
    • 84868926159 scopus 로고    scopus 로고
    • This corresponds to findings from the Consumer Bankruptcy Project that a majority of bankruptcy filers decline the many credit card offers they receive after bankruptcy. See Katherine Porter, Borrowing After Bankruptcy forthcoming 2008, available at
    • This corresponds to findings from the Consumer Bankruptcy Project that a majority of bankruptcy filers decline the many credit card offers they receive after bankruptcy. See Katherine Porter, Borrowing After Bankruptcy (forthcoming 2008), available at http://www.utexas.edu/law/academics/ centers/clbe/assets/Porter.pdf.
  • 321
    • 65349172387 scopus 로고    scopus 로고
    • Interview with Respondent 283
    • Interview with Respondent 283.
  • 322
    • 65349188920 scopus 로고    scopus 로고
    • See Oren Bar-Gill, Informing Consumers About Themselves 6 (N.Y. Univ. Law and Econ. Research Paper Series, Working Paper No. 07-44, 2007), available at http://ssrn.com/abstract=1056381.
    • See Oren Bar-Gill, Informing Consumers About Themselves 6 (N.Y. Univ. Law and Econ. Research Paper Series, Working Paper No. 07-44, 2007), available at http://ssrn.com/abstract=1056381.
  • 323
    • 65349180205 scopus 로고    scopus 로고
    • See Littwin, supra note 20, at 466-78
    • See Littwin, supra note 20, at 466-78.
  • 324
    • 65349170093 scopus 로고    scopus 로고
    • On a national level, Caskey estimated in the early 1990s that the unregulated market rate for pawn shop transactions was approximately 240% per year. CASKEY, supra note 16, at 39.
    • On a national level, Caskey estimated in the early 1990s that the unregulated market rate for pawn shop transactions was approximately 240% per year. CASKEY, supra note 16, at 39.
  • 325
    • 84868926160 scopus 로고    scopus 로고
    • Rent-to-own store interest rates are consistently estimated to be between 100 and 150%. Because nearly every transaction reported in the current study took place in Massachusetts, local interest rates are more relevant, but these are difficult to determine. In Massachusetts, localities regulate pawn shop interest, setting annual percentage rates ranging from 36 to 120%. MASS. GEN. LAWS ch. 140, §§ 70, 72, 78 (2002);
    • Rent-to-own store interest rates are consistently estimated to be between 100 and 150%. Because nearly every transaction reported in the current study took place in Massachusetts, local interest rates are more relevant, but these are difficult to determine. In Massachusetts, localities regulate pawn shop interest, setting annual percentage rates ranging from 36 to 120%. MASS. GEN. LAWS ch. 140, §§ 70, 72, 78 (2002);
  • 327
    • 84868929642 scopus 로고    scopus 로고
    • Technically, the state Division of Banks must approve these local interest rates, MASS. GEN. LAWS ch. 140, § 78 (2002), and it has set an annual limit of 36%, but the regime is so complex that the Attorney General is reluctant to enforce it until new legislation is enacted. Roberson & Beaudet, supra. The state and local restrictions appear to be routinely violated. Id. The study was unable to impute local rent-to-own interest rates because such a determination requires an appraisal of the merchandise's value.
    • Technically, the state Division of Banks must approve these local interest rates, MASS. GEN. LAWS ch. 140, § 78 (2002), and it has set an annual limit of 36%, but the regime is so complex that the Attorney General is reluctant to enforce it until new legislation is enacted. Roberson & Beaudet, supra. The state and local restrictions appear to be routinely violated. Id. The study was unable to impute local rent-to-own interest rates because such a determination requires an appraisal of the merchandise's value.
  • 328
    • 65349184009 scopus 로고    scopus 로고
    • Interview with Respondent 9YY
    • Interview with Respondent 9YY.
  • 329
    • 65349192238 scopus 로고    scopus 로고
    • E-mail from Lisa Bilcik, Vice President, Corporate Counsel, Fingerhut, to author (Sept. 20, 2006, 13:43:21 EST) (on file with author).
    • E-mail from Lisa Bilcik, Vice President, Corporate Counsel, Fingerhut, to author (Sept. 20, 2006, 13:43:21 EST) (on file with author).
  • 330
    • 84868926157 scopus 로고    scopus 로고
    • I had difficulty bringing myself to purchase anything because the prices were so far above what I intuitively expected to pay for the merchandise. Shipping costs further increased the total. At nearly $8.00, shipping represented approximately 28% of my $27.87 balance, meaning that my first installment payment of $5.99 did not even fully cover the shipping charges. In addition, I was charged a $1.00 processing fee each month I made an installment payment
    • I had difficulty bringing myself to purchase anything because the prices were so far above what I intuitively expected to pay for the merchandise. Shipping costs further increased the total. At nearly $8.00, shipping represented approximately 28% of my $27.87 balance, meaning that my first installment payment of $5.99 did not even fully cover the shipping charges. In addition, I was charged a $1.00 processing fee each month I made an installment payment.
  • 331
    • 65349160878 scopus 로고    scopus 로고
    • Littwin, supra note 20, at 462-63
    • Littwin, supra note 20, at 462-63.
  • 332
    • 65349097360 scopus 로고    scopus 로고
    • There is a product known as a secured credit card, but it does not actually offer the borrower any credit. The putative borrower must send the issuer a deposit in the amount of the borrower's line of credit. The borrower may then charge up to the amount she has on deposit, as though she had an unbanked debit card. See, e.g., Interview with Respondent 803. Secured credit cards were disfavored by participants, and none of them were currently using one. Every participant who had used a secured credit card had also used at least one unsecured card.
    • There is a product known as a secured credit card, but it does not actually offer the borrower any credit. The putative borrower must send the issuer a deposit in the amount of the borrower's line of "credit." The borrower may then charge up to the amount she has on deposit, as though she had an unbanked debit card. See, e.g., Interview with Respondent 803. Secured credit cards were disfavored by participants, and none of them were currently using one. Every participant who had used a secured credit card had also used at least one unsecured card.
  • 333
    • 65349137596 scopus 로고    scopus 로고
    • Interview with Respondent 64F
    • Interview with Respondent 64F.
  • 334
    • 65349089452 scopus 로고    scopus 로고
    • Interview with Respondent 803
    • Interview with Respondent 803.
  • 335
    • 65349192822 scopus 로고    scopus 로고
    • Interview with Respondent A26
    • Interview with Respondent A26.
  • 336
    • 65349125868 scopus 로고    scopus 로고
    • Interview with Respondent 283 Admittedly, this is the participant whose grandfather was a loan shark, so her views may be colored by this experience
    • Interview with Respondent 283 (Admittedly, this is the participant whose grandfather was a loan shark, so her views may be colored by this experience.).
  • 337
    • 65349122418 scopus 로고    scopus 로고
    • Interview with Respondent 224
    • Interview with Respondent 224.
  • 338
    • 84868929641 scopus 로고    scopus 로고
    • JOHNSON & JOHNSONα, supra note 91, at 17
    • JOHNSON & JOHNSONα, supra note 91, at 17.
  • 339
    • 84963456897 scopus 로고    scopus 로고
    • note 205 and accompanying text
    • See supra note 205 and accompanying text.
    • See supra
  • 340
    • 65349129414 scopus 로고    scopus 로고
    • Interview with Respondent K72
    • Interview with Respondent K72.
  • 341
    • 65349168882 scopus 로고    scopus 로고
    • Interview with Respondent 921
    • Interview with Respondent 921.
  • 342
    • 65349128755 scopus 로고    scopus 로고
    • Interview with Respondent 99Z
    • Interview with Respondent 99Z.
  • 343
    • 65349189536 scopus 로고    scopus 로고
    • Interview with Respondent B63
    • Interview with Respondent B63.
  • 344
    • 65349176493 scopus 로고    scopus 로고
    • Interview with Respondents 20Y and U67
    • Interview with Respondents 20Y and U67.
  • 346
    • 67650409189 scopus 로고    scopus 로고
    • note 244 for actual interest rates
    • See supra note 244 for actual interest rates.
    • See supra
  • 347
    • 65349102947 scopus 로고    scopus 로고
    • Interview with Respondents V22, X66, and 921
    • Interview with Respondents V22, X66, and 921.
  • 348
    • 65349084361 scopus 로고    scopus 로고
    • Interview with Respondents CC3 and 2AU. The recent FTC study on rent-to-owns suggests that prices are two to two and a half times those of retail stores. See supra note 185
    • Interview with Respondents CC3 and 2AU. The recent FTC study on rent-to-owns suggests that prices are two to two and a half times those of retail stores. See supra note 185.
  • 349
    • 65349149070 scopus 로고    scopus 로고
    • Interview with Respondent X66
    • Interview with Respondent X66.
  • 350
    • 84868928395 scopus 로고    scopus 로고
    • See U.C.C. § 9-615(d)(l) (2006).
    • See U.C.C. § 9-615(d)(l) (2006).
  • 351
    • 65349111269 scopus 로고    scopus 로고
    • See Hawkins, supra note 186, at 2081;
    • See Hawkins, supra note 186, at 2081;
  • 352
    • 65349087884 scopus 로고    scopus 로고
    • Alan M. White & Cathy Lesser Mansfield, Literacy and Contract, 13 STAN. L. & POL'Y REV. 233, 259 n.160 (2002).
    • Alan M. White & Cathy Lesser Mansfield, Literacy and Contract, 13 STAN. L. & POL'Y REV. 233, 259 n.160 (2002).
  • 353
    • 65349120625 scopus 로고    scopus 로고
    • Interview with Respondent K72
    • Interview with Respondent K72.
  • 354
    • 65349141214 scopus 로고    scopus 로고
    • See supra Part IV.C.4.
    • See supra Part IV.C.4.
  • 355
    • 65349189535 scopus 로고    scopus 로고
    • Of course, there is some fungibility here. If a household purchases its personal hygiene items and cleaning products on Fingerhut credit, it frees up funds for groceries and bills. On the other hand, very low-income households have a low ability to make these kinds of substitutions because so much of their income is received through nontransferable benefits like food stamps and rent subsidies
    • Of course, there is some fungibility here. If a household purchases its personal hygiene items and cleaning products on Fingerhut credit, it frees up funds for groceries and bills. On the other hand, very low-income households have a low ability to make these kinds of substitutions because so much of their income is received through nontransferable benefits like food stamps and rent subsidies.
  • 356
    • 65349131825 scopus 로고    scopus 로고
    • Durkin, supra note 47, at 624 (Thus, the revolving [debt] component's share has been growing relative to the nonrevolving component's share, reflecting consumer preference and technological change; many consumers seem to like the convenience associated with prearranged lines of credit... .).
    • Durkin, supra note 47, at 624 ("Thus, the revolving [debt] component's share has been growing relative to the nonrevolving component's share, reflecting consumer preference and technological change; many consumers seem to like the convenience associated with prearranged lines of credit... .").
  • 357
    • 65349175096 scopus 로고    scopus 로고
    • The development of credit card plans that would be more manageable for low-income borrowers is a major focus of the other article based on the current study. Littwin, supra note 20, at 485-88.
    • The development of credit card plans that would be more manageable for low-income borrowers is a major focus of the other article based on the current study. Littwin, supra note 20, at 485-88.
  • 358
    • 65349153679 scopus 로고    scopus 로고
    • Id
    • Id.


* 이 정보는 Elsevier사의 SCOPUS DB에서 KISTI가 분석하여 추출한 것입니다.