Prohibitions, Price Caps, and Discolsures A Look at State Policies and Alternative Financial Product Use

This study uses new nationally representative data from the National Financial Capability State-by-State Survey to examine the relationship between state-level alternative financial service (AFS) policies (prohibitions, price caps, disclosures) and consumer use of five AFS products: payday loans, auto title loans, pawn broker loans, refund anticipation loans, and rent-to-own transactions. Looking across products rather than at one product in isolation allows a focus on patterns and relationships across products. The results suggest that more stringent price caps and prohibitions are associated with lower product use and do not support the hypothesis that prohibitions and price caps on one AFS product lead consumers to use other AFS products.