Is there a “third way” for pay day loans?

Political junkies know that Tony Blair came to prominence in British politics by championing a “third way” for his Labor Party in which he argued that it would be true to the ideals of labor while adjusting its policies to reflect modern realities. Fascinating Henry, you say but what does this have to do with the tea in China?

Well, when it comes to pay day loans, there are two competing camps. On one side are those who view these short-term loans with exorbitant interest rates as categorically evil. They see them as intrinsically exploitive and champion policies such as usury caps on the state level which make them illegal. In the other camp are those who argue that pay day loans reflect the individual choice of adults in a financial jam. The reality is that not everyone is in a position to put aside money for a rainy day.

Is a “third way” possible, which both recognizes the utility of pay day loans while ensuring that they don’t become debt traps for desperate consumers?

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