Has Government Pressure led to Google Banning Ads for the Payday Lending Industry?

Has Government Pressure led to Google Banning Ads for the Payday Lending Industry?

It wasn’t all that long ago that Google seemed to have a real love for the payday lending industry, and other similar types of financial products. However, something seems to have happened that turned the search engine giant away from an industry it once helped to support via its popular online ads.

Google Ventures has been identified as a key investment group for LendUp, a personal lending company that has been criticized for what some call exceedingly high fees that must be paid over the period of just two weeks. The renowned creator of Gmail, Paul Bucheit, is even listed as one of the top investors for LendUp. About four months ago, Google Ventures decided it was so enamored with the concept for this project that they ponied up about $150 million.

It seems that Google Inc. has decided that they are against these types of lending companies now, though. The company said that leadership reviewed their policies and came to the conclusion that any personal loans that charge more than 36 percent APOR or with terms under 60 days will be permanently banned for advertising on their worldwide networks. According to a public message from the company, “This change is designed to protect our users from deceptive or harmful financial products.” It is a little bit ironic, though, that Google is pretty much admitting that it has to provide a measure of protection to users from the very types of financial products that they have invested millions and millions of dollars in over the years.

It turns out that LendUp is not the only lending company that Google invested in that charges fees that could be interpreted as being more than 36 percent APR. Another business lending company they invested in was known to charge even more costly fees than LendUp. And Google invested about $17 million in that company. The company even stated publicly that they considered the vision of the company’s management to be “game changing.”

It does look like the game has changed, now that Google has drastically altered its stance after doing policy reviews and additional research. How is it that a company with such monumental resources is only just now starting to act like it has new insights on the payday lending industry, when payday lending companies have been actively advertising on Google’s advertising networks for many years? Google even changed its algorithms over time based on organic web searches for payday loans. To really drive this point home, the “loans” general search category is the 2nd most profitable for the company. It really is strange, then, for the company to act like it had no previous knowledge of payday lending companies, isn’t it?

Google isn’t feigning innocence without reason, though. The CFPB filed a lawsuit against Davit Gasparyan last month for his ventures in providing customer leads to payday lending companies. By essentially acting as a middleman, Gasparyan has found himself in a lot of hot water. We all have to wonder if maybe Google was starting to fear that they could wind up in the same boat, and dealing with some heavy charges being leveled by the Consumer Financial Protection Bureau.

If the CFPB would not hesitate to put pressure on big banks to stop providing financial services to industries, like the payday lending industry, then there is no reason to think that they would not find a way to drum up charges against Google if the company continued to offer its popular advertising services to payday lending companies. It looks like the world’s most popular search engine saw the writing on the wall, and decided to do an about-face before they opened themselves up to facing the wrath of the CFPB or other consumer watchdog groups.

Similar Posts
The Future Looks Bright for Payday Loans and Payday Lenders
The Future Looks Bright for Payday Loans and Payday Lenders
The Consumer Financial Protection Bureau, the creation and hobby horse of Senator Elizabeth Warren, might be facing the risk of...
New Research May Show Why Consumers Take Out E Payday Loans Online
New Research May Show Why Consumers Take Out E Payday Loans Online
Anyone who goes online knows that there are plenty of companies that offer online lending options, like those sites that...
Is it possible to really make sense of new CFPB Payday Lending Rules?
Is it possible to really make sense of new CFPB Payday Lending Rules?
There used to be an old cartoon that ran on Saturday mornings, called Schoolhouse Rocks. These short, animated shows tried...

There are no comments yet, add one below.

Leave a Reply


You must belogged in to post a comment.