Do payday lenders target certain demographics?

Hot on the heels of the foreclosure over-exposure in the news, consumer attention seems to have shifted to payday lending. Consumerist mashed together a map of payday loan centers with a map of census information, and the result is clear: payday lenders do, indeed, target less-than-affluent neighborhoods.

This shouldn’t surprise anyone, however, although it might cause us some consternation. The concentration in less-than-affluent neighborhoods should be unsurprising for the same reason that you won’t find an Aldi grocery store in an upper-middle-class neighborhood: lack of customers. Payday lending is a “subprime” market for unsecured and risky credit. There are few subprime borrowers in wealthier neighborhoods, where people have the credit score to get, say, a credit card with a bargain rate of, say, 19% APR, and don’t have to stomach the 300-1,000% APRs charged by payday loan centers.