Google announced Wednesday that it will no longer allow ads for payday loans on its search engine, dealing the industry a public relations setback just as the federal government weighs new rules expected to reshape the industry.
Google director of global public policy David Graff announced the change in Google’s policy in a blog post Wednesday morning, stating that his “hope is that fewer people will be exposed to misleading or harmful products.”
A group of civil rights organizations immediately claimed credit for the switch, citing lengthy collaboration between advocates of new rules limiting payday lending and the technology company.
“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,” said Janet Murguia, president of the National Council of La Raza, a group that advocates for Latinos.
A representative for Google declined to say how many ads or how much revenue would be affected by the change.
In his post, Graff explained that ads would not be allowed for loans with repayment due within 60 days of being issued, or for loans with annual percentage rates above 36 percent. Payday loans typically have APRs that are 300 percent or higher, when their fees are translated into an APR.
Payday and other forms of small-dollar, short-term loans are likely to face sweeping new rules in the years ahead. The Consumer Financial Protection Bureau, the regulator created by the 2010 Dodd-Frank financial reform law, is preparing new regulations meant to protect consumers from spiraling debt that the industry fears could effectively ban many forms of payday lending.
