The effect of payday lending restrictions on eviction filings

About 12 million U.S. households use payday loans each year, which provide short-term, unsecured credit at high annualized interest rates. We study the effect of state-level payday loan restrictions on eviction filings. Access to payday loans may help households remain current on rent by expanding credit availability, but can also harm them through high borrowing costs. Using staggered difference-in-differences models across seven treatment states, we find no significant pooled effect. However, this result masks substantial heterogeneity. Analysing each treatment state separately, we find that some states exhibit significant increases in eviction filings following restrictions while others exhibit significant decreases. These findings suggest that the relationship between payday loan access and housing stability is highly context dependent.