Advocates Applaud Google’s Ban on Payday Loan Advertisements
WASHINGTON – A broad and diverse coalition of advocates is applauding Google’s announcement that it will ban ads for payday loans and other predatory lending products. Today’s announcement is the culmination of a lengthy collaboration between this coalition and Google to ban payday loan ads. Other products that Google has banned advertisements for include “dangerous products and services,” a category that includes guns, tobacco, explosives, and recreational drugs.
Background
A recent report by Upturn noted that payday loan search ads are common online, even in states where payday lending is illegal, and can sell for more than $10 per click. Google’s change reflects the growing national consensus that payday loans are harmful. It also comes as the Consumer Financial Protection Bureau prepares to issue regulations on these products.
In December 2013, the membership of The Leadership Conference on Civil and Human Rights of more than 200 national civil and human rights organizations voted unanimously for a resolution urging states, Congress, and federal agencies to increase regulatory oversight and enforcement of payday lenders.
Members of the diverse coalition applauding Google’s new policy include The Leadership Conference on Civil and Human Rights, Americans for Financial Reform, the Center for Responsible Lending, the Center on Privacy & Technology at Georgetown Law, Upturn, National Council of La Raza, NAACP, Open MIC, National Hispanic Media Coalition, Common Sense Kids Action, and ColorofChange.org.
· Click here for a question and answer document about this development.
· Click here to read Google’s announcement.
Quote from David Graff, director of Global Product Policy for Google
“We have an extensive set of policies to keep bad ads out of our systems and we take these policies very seriously. In particular, financial services is an area we look at very closely because we want to protect users from deceptive or harmful financial products.”
Below are quotes from key voices in this coalition:
Wade Henderson, president and CEO of The Leadership Conference on Civil and Human Rights
“Banning predatory payday loan ads shows that Google is willing to put people before profits. This new policy addresses many of the longstanding concerns shared by the entire civil rights community about predatory payday lending. Low-income people and people of color have long been targeted by slick advertising and aggressive marketing campaigns to trap consumers into outrageously high interest loans. This ban puts payday loans in their rightful place alongside explosives and tobacco as dangerous products that deserve the highest level of scrutiny from regulators and businesses alike.”
Lisa Donner, Executive Director of Americans for Financial Reform
“Google’s important new standards will stop abusive lenders from using their far reaching platform to market dangerous debt-trap products that do serious and lasting harm to consumers. We hope and trust that other online companies will follow Google’s excellent example.”
Keith Corbett, executive vice president of the Center for Responsible Lending and co-chair of Economic Security Task Force of The Leadership Conference on Civil and Human Rights
“As a leading search engine and innovator, Google’s announced updated policy on financial services advertising is a major consumer coup. By removing ads that lure financially challenged consumers into long-term and costly debt traps, Google is displaying what corporate citizenship looks like. Our hope is that others will soon follow suit.”
Alvaro Bedoya, executive director of the Center on Privacy & Technology at Georgetown Law
“The Internet should not be a place that profits from your weaknesses. If you’re broke and search the Internet for help, you should not be hit with ads for payday lenders charging 1,000 percent interest. Yet that’s what happens on most search engines. For payday lenders, targeting the vulnerable is not an accident – it’s a business strategy. Today, the world’s largest search engine is saying: ‘We want no part in this.’ Google’s decision to ban these ads sets an industry standard that other Internet companies would do well to follow.”
Aaron Rieke, principal at Upturn
“Today, the world’s most popular search engine announced that it will no longer profit from payday loans. When people struggle to make ends meet, they often turn to Google to search for answers. These searches trigger advertisements for high-interest loans, bought by an industry that traps consumers in cycles of debt. These ads appear across the nation, even in communities that have outlawed payday loans. Google’s new policy will put an end to these ads, providing significant new protections for its millions of users.”
Janet Murguía, president and CEO of NCLR (National Council of La Raza)
“Unscrupulous payday lenders prey on the most vulnerable, including millions in communities of color in neighborhoods across America, and in the 21st century, they are increasingly doing so on the Internet. With Google’s announcement today, we take an important step in fighting back against the misleading and harmful ads that lure people into a debt trap. This is a terrific example of how civil rights organizations and tech companies can come together to help protect the rights of all Americans online.”
Hilary Shelton, the Director of the NAACP Washington Bureau and the Senior Vice President for Policy and Advocacy
“We commend Google for their very courageous, thoughtful, and responsible policy position to help curb the tide of predatory lending by banning search ads for payday loans on their site. Payday loans, many of which vary in their interest rate from 200 to 600 percent, have already driven too many people deeply into the debt trap, a disproportionate number of whom are people of color and folks of modest means. This is a debt trap that in many cases began as a $200 to $300 loan to perform necessary tasks such as repairing a broken car or fixing a leaky pipe. This loan turned into a repayment burden that far exceeds the initial amount, which in turn locked the lender into a debt that sometimes carried them into months or sometimes years.”
Michael Connor, executive director of Open MIC
“Consumer trust is critical for success in the digital world, which is why online businesses need to demonstrate that they’re capable of protecting all users, including low-income communities that are the targets of online predatory lending schemes. By banning ads for payday loans, Google is highlighting how corporate accountability can be a positive for the company, its shareholders and society.”
Michael Scurato, vice president for policy at the National Hispanic Media Coalition
“Payday lenders have long preyed on Latinos and other people of color. It is important to ensure that the Internet, which holds great promise for improving economic outcomes among these communities, not also be used as an agent of harm. The National Hispanic Media Coalition is grateful for Google’s leadership in deciding that it wishes to play no role in these schemes to rob people of their hard-earned income in times of need. We encourage other search engine providers to follow suit so the popular platforms that people use online can also be trusted to direct them to responsible lenders.”
James P. Steyer, CEO and founder of Common Sense Kids Action
“Payday lending hurts families, with children suffering devastating effects when parents are forced to prioritize crushing loan payments over child support. Google deserves high praise for its move to ban payday loans and put low-income families above its bottom-line, and we encourage other companies to follow suit.”
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