Google Will Ban Ads for Payday Loans

An organization for payday lenders calls Google's new policy "censorship."

BySusanna Kim
May 11, 2016, 2:37 PM
PHOTO: The Google logo is seen inside the company's offices on March 23, 2015 in Berlin.
The Google logo is seen inside the company's offices on March 23, 2015 in Berlin.
Adam Berry/Getty Images

— -- Google will ban ads by payday lenders, saying the new policy aims to protect people from "deceptive or harmful financial products."

The tech giant announced today that it will ban ads for loans where repayment is due within 60 days of the date of issue. In the U.S., it will also ban ads for loans with an APR of 36 percent or higher. The new policy takes effect on July 13.

"When reviewing our policies, research has shown that these loans can result in unaffordable payment and high default rates for users so we will be updating our policies globally to reflect that," Google's Director, Global Product Policy, David Graff wrote in a blog post.

Facebook already bans ads on its social media site for "payday loans, paycheck advances or any other short-term loan intended to cover someone's expenses until their next payday," according to the company's advertising policy.

A national organization for payday lenders, the Community Financial Services Association of America, called Google's policy "discriminatory and a form of censorship."

The association argues that the need for short-term credit products, such as payday loans, may help the 24 million households who are "underbanked." The group's membership is comprised of predominantly storefront, brick-and-mortar lenders, according to the CFSA.

"The internet is meant to express the free flow of ideas and enhance commerce," a statement from the association read. "Google is making a blanket assessment about the payday lending industry rather than discerning the good actors from the bad actors. This is unfair towards those that are legal, licensed lenders and uphold best business practices, including members of CFSA. Companies that restrict advertising of payday loans also do their users a disservice because consumers may need access to short-term credit that they cannot get from traditional banks."

The association's members offer other financial services, including installment loans, check-cashing, pre-paid cards and money transfers, according to the CFSA.

Google disabled more than 780 million ads last year for a range of reasons, including counterfeiting and phishing, according to Graff's blog post.

He said the latest announcement "is designed to protect our users from deceptive or harmful financial products."

Graff added that the new policy will not affect companies offering loans such as mortgages, car loans, student loans, commercial loans and credit cards, or revolving lines of credit.

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