CEI Daily Update
Issues in the News
1. CONSUMER
The Virginia legislature moves to severely restrict the use of payday loans.
CEI Expert Available to Comment: Center for Entrepreneurship Director John Berlau on the unintended consequences of outlawing payday lending:
“Evidence is already mounting from other states that caps on payday loans reduce choices for consumers and leave them financially worse off than before. Ironically, the main beneficiaries of laws pounding on payday lenders have been big banks and credit unions making millions from the overdraft fees that often serve the same purpose as a small loan for unexpected circumstances.”
2. BUSINESS
The governors of Florida and Louisiana attempt to create a government fund to prop up insurance companies in the event of a large-scale disaster.
CEI Expert Available to Comment: Senior Fellow Eli Lehrer suggests a better path:
“While [Florida Governor Charlie] Crist, [Louisiana Governor Bobby] Jindal, and their counterparts are making an effort to confront a real problem, several other ideas deserve a try before the nation takes the enormous risk of setting up a national catastrophe fund. First, reducing regulation on insurance companies marketing securities to back insurance policies – an idea even the left-wing Consumer Federation of America supports – could provide many of the benefits of a government program without the need for intervention.”
3. PRIVACY
The FBI prepares to launch a massive new database of people’s physical characteristics, sparking privacy concerns.
CEI Expert Available to Comment: Editorial Director Ivan Osorio on different kinds of databases:
“The real worry here is not that this information could be collected — it exists and is bound to be compiled somewhere — but that it is being collected on such a massive scale by government, which hopes to centralize its own access to it. Companies today collect a wide amount of consumer information, much of it surrendered willingly, in exchange for greater convenience — an example of this are supermarket discount cards, which track consumer purchases in exchange for discounts and coupons for items the customer is more likely to buy. Companies that collect such information have a very good incentive to protect such data, because mishandling it leads to angry customers who then take their business elsewhere.”
Blog feature: For more news and analysis, updated throughout the day, visit CEI’s blog, Open Market.
FOR MORE INFORMATION
To contact a CEI expert for comment or interviews, please call the CEI communications department at 202-331-2273 or email to [email protected].