Who Won the Government Shutdown? Shops Hustling Payday Loans.
Inside Subprime: Jan 29, 2019
By Aubrey Stitler
As the federal government reopens after a record-setting 35-day partial shutdown, most companies and individuals are reporting overwhelmingly negative economic repercussions from lost work, missed paychecks, and business opportunities they can never regain. Overall, the Congressional Budget Office is estimating an $11 billion loss across the U.S. economy—$3 billion of which it projects cannot and will not be recovered.
Despite the financial trauma from which most sectors are now recovering, there are a few groups of businesses that may log an overall benefit from the shutdown: payday loan firms.
Many of the 800,000 federal employees who were either furloughed or working without pay for five weeks faced and will continue to face financial crises, putting their housing, health, and general wellbeing at risk. For those who could not turn to family, friends, or traditional financial institutions for a loan, payday loan firms were likely a quick and easy alternative.
However, as Scott Astrada of the Center for Responsible Lending warns: customers should always be skeptical of financial services and products that are “debt traps by design [that can lead to] a cascade of financial consequences that include bank penalty fees, delinquency on other bills, and even bankruptcy.”