Petty Debt: A Comprehensive Examination of Michigan’s Deferred Presentment Industry and Its Growth between 2000-2018

Abstract: The payday lending industry in Michigan grew rapidly in the first decade of the 2000s, providing high-cost loans to borrowers with a damaged credit history and few other financial options. The typical clientele of payday lenders represents a specific socioeconomic demographic, wherein they are most often the ‘working poor’. Certain demographic variables may influence the likelihood that a person will use a payday lender during their life. This study examines the growth pattern of payday lender locations in Michigan between 2000 through 2018, revealing that the growth of payday lender locations closely followed economic stress in the state. Furthermore, a demographic examination produces correlations that link payday lender locations to urban areas and perhaps certain racial demographics, though hesitates to make any pronouncements on the latter. The study encourages future research into understanding the link between the growth of fringe banking services and economic instability, as well as demographic studies.