Zinman (2010) finds that residents of states that relocated to limit loans that are payday prone to bounce checks following the ban. Melzer and Morgan (2009) find similar outcomes for overdraft cost earnings at banking institutions, and Morgan, Strain, and Seblani (2012) realize that payday loan bans lead to increased fee that is overdraft and much more came back checks. Nonetheless, Campbell, Martinez-Jerez, and Tufano (2012) discover that a loan that is payday in Georgia resulted in a lowering of involuntary checking-account closures, a result this is certainly closely related to bouncing a lot of checks. Galperin and Weaver (2014) look for a result that is similar the employment of refund expectation loans (RALs)вЂ”bans on payday advances result in a decrease into the utilization of RALs, which implies that the 2 items are complements.
Therefore, the literature that is current a somewhat conflicting view regarding the relationship between pay day loans as well as other AFS credit services and products.
In specific, proof exists that consumers look to pawnshop loans as complements to pay day loans (at minimum in states that enable rollovers). Some studies suggest, however, that consumers turn to other forms of high-interest credit (for example, overdrafts and bounced checks) when they lose access to payday loans, while other research suggests the opposite on the other hand.