Payday Lenders Fuel Crime, Drive Down Property Values

Payday lenders, such as CashToday which is undergoing a lawsuit for malpractice, have long been known to reduce property values.
Payday lenders, such as CashToday which is undergoing a lawsuit for malpractice, have long been known to reduce property values.

Payday lenders already get a bad rap for offering high-priced loans to cash-strapped consumers. Now here's another reason that cash advance outlets may come under attack: Researchers say the proliferation of payday lenders in low-to-moderate income neighborhoods fuels violent crime and drives down property values.

A study published in the May 2011 issue of Criminology and Public Policy, a publication of the American Society of Criminology, states, "The evidence is consistent in indicating that payday lending is predictive of violent crime rates.

"The substantial costs that customers pay for using payday lenders have long been documented," the study continues. "Our findings indicate that important broader community costs also might persist – such as exposure to crime – that all residents pay when they reside in neighborhoods with a concentration of payday lenders."