1. Payday Lending Michael S. Barr University of Michigan Law School

2. Central Question Can you provide for consumption smoothing while reducing debt traps?

3. Detroit Area Study AFS complementary (positive but weak correlations) Payday also complementary w bank overdraft & CC cash advance Financial hardship Living expenses, emergencies, & paying off debts Demand for debt

4. Further Research Welfare effects Heterogeneity of payday users AFS interactions AFS-Bank interactions Experimemts financial stability card

5. Policy Directions Financial products Direct deposit & auto- pay Savings policy Financial management tools Level playing fileld, unified regulation Disclosures Comparisons Rollovers as finance charge Sticky defaults Debiasing Self imposed consumer constraints Product regulation Minimum length of term Rollover restrictions Cooling off periods