Posted on May 12, 2016

Google to Ban Ads for Payday Loans

Jessica Guynn, USA Today, May 11, 2016

Bowing to growing pressure from consumer groups, Google will no longer accept ads for payday loans, a move that critics hope will create a new industry standard.

“Research has shown that these loans can result in unaffordable payment and high default rates for users so we will be updating our policies globally to reflect that,” Google’s product policy director, David Graff, wrote in a blog post.

Google defines payday loans as loans due within 60 days of being issued and in the U.S., loans with an annual interest rate of 36% or higher.


The ban, which takes effect on July 13, comes ahead of stricter regulations from the Consumer Financial Protection Bureau. Facebook officially banned advertisements for payday loans last August. Before that, the giant social network’s policy was to only allow ads from payday lenders with Facebook’s permission.

A trade group for payday lenders called Google’s new policy “discriminatory and a form of censorship.”

“The Internet is meant to express the free flow of ideas and enhance commerce. Google is making a blanket assessment about the payday lending industry rather than discerning the good actors from the bad actors,” Amy Cantu, spokeswoman for the Community Financial Services Association of America, said in an emailed statement. “This is unfair towards those that are legal, licensed lenders and uphold best business practices.”

Cantu said the statement also applies to Facebook “and others with these policies.”

Critics of payday lenders say they hope Google’s new position will significantly undermine opportunistic lenders that hunt for customers on the Internet and disproportionately target communities of color still struggling to recover from the economic downturn.