You might have read this morning about a left-leaning watchdog group’s criticism of N.C. House Speaker Thom Tillis over legislation that changes rules for the consumer loan industry.
Carolina Journal Online readers might remember an interview with University of Tennessee finance professor Harold Black that supported the changes endorsed by Tillis and a majority of his House and Senate colleagues.
Kokai: … If we were going to have this industry operate in the best way possible for consumers, what would we do differently than we do today?
Black: All of the research shows that these sorts of caps — and when you impose those caps, you actually decrease the wealth and well-being of the people who you are intending to protect — the research shows that there are higher bankruptcies. It shows that people become worse off financially. It shows strife within families, increases in divorce, increase in debt burdens. And the ironic thing is that the research also shows that when those caps are lifted, that people become better off and actually reduce their debt. And those are things that need to seriously be considered by the public — in that legislation usually trying with the intent of helping people actually turns out to hurt them and make them worse off.
Kokai: Another case of the law of unintended consequences.
Black: Exactly right.