When most people think of the free market economy, they don’t consider payday lenders to be such a huge part. These people and businesses typically have a reputation that is akin to loan sharking or some other negative connotation. Even though this is often true and most regulation is against these predatory loan practices, there is an even bigger problem when the entire market gets monopolized by a few certain payday lending companies. The latest news from Colorado indicates that this is a distinct possibility and one that the public needs to be aware of at all times in the near future.
Colorado Payday Loan Debt
The payday loan debt in Colorado has not changed much since 2011, but reports are showing that the number of lenders is down by 16%. That means the market share is being picked up by an ever growing few businesses that are becoming powerful. This has huge implications for the general public. As a company gets bigger, it has to worry about market share less and about fighting regulations more. Once these companies start to get really big, they will no longer have to fight one another, but will instead opt to get payday loan debt legislation destroyed.
There are many ways that this can happen over the course of the next few years. Lawmakers are hoping that the drop in the number of payday loans does not mean that bigger companies are starting the beginning efforts of expansion, but it is looking increasingly likely that this is the case.
Removing the power from these large companies is nearly impossible once they have the funds to sway legislators and contribute to campaign funds. These types of dealings with the government and legislators makes it hard to pass any kind of meaningful legislation that protects the people.
USA and Colorado Payday Lenders
The United States may be on the same path that Colorado is now facing. Payday lenders are finding it increasingly difficult to get into the business because the bigger players are growing in scale. This means that Colorado might be a microcosm for the environment that we will soon be seeing in the payday loan companies of the entire country.
For many people, this is a scary prospect. The idea of payday lenders getting bigger and more market share is a scary thought as there are simply too many ways they can manipulate legislation. As it is, there are 29 states that are currently unregulated, which means that it is very tough to get anything passed anyway!
If people are worried about legislation now, it is no wonder they are more worried about the future. With these companies earning more money, it doesn’t seem as inconceivable that they will have more power to change the legislation and fit their whims. As the public complains, they still need the quick cash, which makes it hard to regulate a service that people are using so often for their own needs. The future of payday lending might not be nearing an end with developments like this.
