Google announced Wednesday that it will ban all payday loan ads from its site, bowing to concerns by advocates who say the lending practice exploits the poor and vulnerable by offering them immediate cash that must be paid back under sky-high interest rates.
This is huge. I used to run Google AdSense ads on this site, but stopped because it just felt wrong to be writing about the evils of payday lending while giving them a platform to reach consumers.
Google isn’t erasing payday lenders from the Internet. You will still be able to search for a payday loan. This just means payday lenders won’t be able to feature their ads on unrelated search terms.
Payday lenders are already complaining that this is unfair, of course.
They insist payday loans are a valid form of emergency financing. After all, most Americans couldn’t come up with even $400 in an emergency. What other option do they have?
The problem is that payday loans have an alarming tendency to prolong the emergency and make it worse. Sure, you may be able to make rent with a payday loan, but what good is that when you can’t buy groceries a month or two later because your payday loan keeps rolling over and all your money is going to pay the fees? And many people aren’t using payday loans as emergency financing; they are using payday loans simply to manage their cash flow.
It’s not unfair to point out the obvious: payday loans really aren’t good for anyone. Bravo to Google (and Facebook, which already banned ads from payday lenders) for taking a stand!