Google Bans Payday Loans From Its App Store
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What is the main topic discussed in this episode?
Here's your money briefing. I'm Charlie Turner at The Wall Street Journal in New York. Google is banning payday loan apps from its App Store. J.R. Whelan will talk about this in a moment with Wall Street Journal reporter Yuka Hayashi. First, here are some top money stories. Travelers looking for deals on flights this holiday season may be out of luck. Major airlines are still dealing with the fallout from the grounding of the Boeing 737 MAX airplanes, and that means fewer planes. The FAA grounded the 737 MAX after it was implicated in two separate crashes, and the agency still hasn't said when it expects the planes to fly again. Many airlines have opted to remove 737 MAX planes from their schedules through early 2020 and have now had to rebook passengers on other flights or cancel some trips entirely.
This may put pressure on airlines to raise prices this holiday traveling season as they operate at reduced capacity with increased demand. Experts say book early, be flexible with dates, or choose a carrier that doesn't have the 737 MAX in their fleet. It looks like gold is the new black when it comes to debit cards. The Royal Mint, which makes UK bank coins, launched its first debit card for the ultra-rich, made of 18-carat solid gold.
What is Google’s new policy on high‑interest payday loan apps and when was it enacted?
The card itself costs over $23,000. Demand for precious metal cards has been growing in popularity. In August, Apple launched a titanium credit card. However, some people took to Twitter to express outrage about the cost of the card and the excess they say it represents. What would Jesus buy? The Wall Street Journal says biblically responsible investing is booming as investment managers who are losing assets to index funds strive to find new niches, whereas many socially responsible investors favor companies that recruit LGBT workers or donate to Planned Parenthood and the like. Biblically responsible investors shun companies that profit from or support abortion, pornography, gambling, or LGBT people.
The latest sign of the rise of faith-based investing was the launch of the Inspire International ESG Exchange Traded Fund on September 30th. Its ticker symbol, WWJD, short for the popular expression, What Would Jesus Do?
Why did Google set a 36% interest‑rate threshold to ban certain lending apps?
Google has banned high-interest consumer loan services from its App Store, and that limits payday lenders' access to its customers using Android phones. Wall Street Journal reporter Yuka Hayashi joins us with details. So, Yuka, Google actually instituted this ban in August. Why did they ban the payday lenders from its App Store?
Well, Google says that they wanted to protect consumers from what they call deceptive and exploitative loan terms. What Google is doing is to ban apps from their app store that offer consumer loans that charge interest rates of 36% or higher.
How does a 36% cap effectively exclude traditional payday lenders from Google Play?
So they've set that line as a threshold of 36%.
Yes, that's right. There are consumer loans that charge less than 36%. But in order for what we have viewed as payday lenders to survive, the interest rates must be much, much higher than 36%. So imposing a rate cap of 36% effectively shuts out payday lenders from the market.
And this is in Google's first action against payday loan companies, right?
That's right. In 2016, Google came out and said that they are going to ban advertising for payday loans from their browser. And at that time, they also drew some criticism from the loan industry.
What is the relationship between the use of Android phones and who payday loan companies typically target?
So there is a lot of overlap between borrowers of payday loans and users of Android phones. According to research from a data research company called Comscore,
Which consumers are most affected by removing payday loan apps from Android phones?
Less than a third of consumers from households making $25,000 or less use Apple phones, whereas over 50% of those consumers use Android phones. And if you look at the other end of the spectrum, and look at consumers from households making $250,000 or more, basically two in three people use Apple phones and less than one in three consumers use Android phones.
Consumer advocates praised Google, but the Online Lenders Alliance that represents large lenders, they had a very different view.
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Chapters
6 chapters
1
What is the main topic discussed in this episode?
0:06–1:18
2
What is Google’s new policy on high‑interest payday loan apps and when was it enacted?
1:18–2:24
3
Why did Google set a 36% interest‑rate threshold to ban certain lending apps?
2:24–3:06
4
How does a 36% cap effectively exclude traditional payday lenders from Google Play?
3:06–4:16
5
Which consumers are most affected by removing payday loan apps from Android phones?
4:16–6:37
6
How have industry groups and consumer advocates reacted to Google’s ban?
6:37–6:49
Speakers
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