Lending to unbanked, underbanked or consumers with poor credit has always been controversial. The loans usually carry a high interest to cover high default rates, yet politicians claim that cash-strapped consumers are "tricked" into high interest loans that cause them to default.
The stock prices of companies like EZCORP (NASDAQ:EZPW), DFC Global (NASDAQ:DLLR), and Cash America International (NYSE:CSH) have grossly underperformed this year probably because the credit became more available from traditional sources but also because of a constant threat of regulation by Consumer Financial Protection Bureau (CFPB), the states, and foreign governments (UK in case of DLLR) who find these lenders an easy target of populist outrage.
MicroFinancial Inc. (NASDAQ:MFI),...
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