Regulate - Yes
Regulate - No
The ones that do not pay back are not able to use the services, and i would assume reported to some credit agency, which they all use.
To find the default rate, rate of return for the companies, they would need access to their books.
If my post offends you, I deeply Apple-O-Jize.
that box is labeled 'the most financially risky prospective borrowers who exist'
if they were not so labelled they would have access to alternative credit at a more favorable interest rate
these are signature loans. if they had collateral, they could have pawned those assets for quick cash ... which also indicates these debtors to be judgment-proof
servicing and collecting these payday loans is going to be MUCH more difficult than recovering any less risky portfolio of loans
this pool of borrowers has already demonstrated that they are a huge risk as debtors
causing the cost of servicing/collecting those outstanding debts to be very expensive
and the charge offs, where recovery is found not to be cost effective, is also going to be enormous when compared to any other group of borrowers
so, the lender will eat a substantial portion of the principal loaned in aggregate, and will incur high labor costs to collect those accounts that are recoverable
there is no way that someone would expose their cash to such high risk lending unless they were also going to generate a high rate of interest of offset the very high costs of such lending
those debtors have obligated themselves knowing they are going to have to repay an extraordinary amount of interest
but despite knowing this they borrow. many of them repeatedly
so, if you were to put your personal funds at risk within this clientele, what rate of interest would you command to make such loans?