Google Effectively Bans PayDay Lenders from Advertising their Loans

Google UK

Google has banned high-interest rate lenders from the Google Play app store. First reported by WSJ.com, the move was said to be made to protect people from “exploitive personal loan terms.”

The report quoted a Google spokesperson:

“Our Google Play developer policies are designed to protect users and keep them safe. We expanded our financial-services policy to protect people from deceptive and exploitative personal-loan terms.”

Google has long managed what could, or could not, be advertised on its platform.

According to Google’s advertising terms of service:

In the United States, we do not allow ads for personal loans where the Annual Percentage Rate (APR) is 36% or higher. Advertisers for personal loans in the United States must display their maximum APR, calculated consistently with the Truth in Lending Act (TILA).

This policy applies to advertisers who make loans directly, lead generators, and those who connect consumers with third-party lenders.

In the US, interest rate caps for lenders may be set at the state level but states vary in how they regulate the sector of high-interest-rate lending.

The report quoted Mary Jackson, chief executive of the Online Lenders Alliance, who commented on the move by Google:

“What Google is doing is unfair in the commerce world. It harms legitimate operators and harms consumers looking for legal loans.”

Jackson represents some of the lenders being impacted by the move.

The challenge tends to be in the balancing act of providing access to credit to a segment of the population that has nowhere else to go. Some observers believe that if a loan is priced on risk, it should be allowed.

The other side of the argument is that some lenders simply create a debt trap that borrowers are never able to exit thus exacerbating an already challenging problem.

The fact that states are not unified in their regulatory approach makes the problem even a bigger enigma. Google appears to be taking matters into their own hands by setting an across the board interest rate cap.

Google has long banned certain financial services such as initial coin offering advertising. Binary options are on the banned list too.

But crypto exchanges and mining ads are accepted if they adhere to Google’s guidelines. It just depends on what Google deems worthy or not for its millions of users.

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