Case 10: Payday Loans: A Need Product or a Scam?
1. Who are the stakeholders in this case and what are their stakes?
2. Have you ever taken out a payday loan or title loan? What was your experience?
3. What is your evaluation of the corporate social responsibility of the payday lending industry,
using the four-part definition of CSR? Is payday lending an exploitive industry that snares
borrowers in a never-ending cycle of debt?
The four components of CSR are (1) economics, (2) legal, (3) ethical, and (4) philanthropic.
While the payday lending industry certainly derives economic benefits to the industry, it d
4. Is the industry socially responsible but some of its members are engaging in questionable
practices? What questionable practices are most troublesome?
5. Given the strong need for payday loans on the part of some citizens, should the industry be
further regulated such that borrowers no longer have access? What are borrowers to do who do
not meet the new federal regulations?
6. Is the title loan industry the same as the payday lending industry? How do they compare?
7. The states have regulated the payday lending industry. Should the federal government be
getting involved with regulating this industry? What will be the effects of the proposed CFPB
regulations?
8. What is your assessment of the Google ban? Does Google have a conflict of interest in
opposing this ban?
9. Should the CFPB back off and let the marketplace and the states handle payday lending
issues?