Opinion

A Payday For Google’s Moral Posturing

Jeffrey H. Joseph Professor, George Washington University School of Business
Font Size:

Facebook has come under sharp criticism from conservatives following allegations from former contractors that employees censored right-leaning stories and media outlets from Facebook’s news feed. Not to be outdone, Google has decided to wear ideology on its sleeve and ban ads from certain legal businesses—and the company may actually profit, too.

Google announced last week that it will ban all advertisements for payday loans from its ad system starting in July.  The move “is designed to protect our users from deceptive or harmful financial products,” according to Google. But that appears to be mere cover for more base motives.

While payday loans have received criticism from liberal activists for allegedly preying on the lower class, experts have found that this is anything but the case. The assistant vice president in the Federal Reserve Bank of New York and several academics recently noted, “Except for the ten to twelve million people who use them every year, just about everybody hates payday loans.” Their analysis found that many of the common criticisms are misleading or incorrect. For instance, while payday loans have an annualized percentage rate of 400 percent, the loans are not meant to be yearlong—they’re short-term. They also cite research finding that payday loans don’t, as alleged, target minorities. Payday loans are simply ways for (generally) low-income people to get money who don’t have the credit to get loans from traditional lenders.

If people who use payday loans appreciate the service, then what’s the big deal to Google? It turns out there’s a financial incentive to Google’s ban on payday ads: Google has invested in competing startups. Google Ventures (now known as “GV”) is the investment arm of Google. The firm led initial investment totaling $14 million into LendUp, a site that advertises itself as an “alternative” to payday loans. While the new Google policy against payday loans prohibits “ads for loans where repayment is due within 60 days of the date of issue,” LendUp offers 30-day loans where “good credit is not required.”

Google Ventures also backs On Deck, which offers business loans, while Google has backed Lending Club, which offers peer-to-peer lending. This information isn’t disclosed in Google’s announcement that it’s banning payday loan ads, even though it’s a clear potential ulterior motive.

Google isn’t the only opposition to payday lending that has skin the game. Much of the anti-payday criticism comes from a nonprofit called the Center for Responsible Lending. CRL has been a leading naysayer against payday loans in public and in pressuring federal regulators at the Consumer Protection Financial Bureau to crack down on payday loans.

CRL’s parent organization is the Self-Help Credit Union, which offers loans and other financial services and would benefit from payday loan elimination. CRL employees have left to go work at CFPB; the agency “worked hand-in-hand” with CRL in crating regulations, according to Politico. CRL is also funded by a number of banks and mainstream financial institutions that could benefit from elimination of payday loans.

No one would bat an eye if Google (or Facebook, or another company) cracked down on ads for illegal substances or activities like prostitution and drugs. But Google is discriminating against an entire financial sector that is offering a legal product that many Americans use to help with short-term financial issues.

Ironically, while Google is wringing its hands over small loans, the search engine company is continuing to facilitate illegal activity. Google the latest blockbuster movie and the word “torrent” and you’ll see a host of sites turn up offering illegal downloads. Sites that illegally stream content are readily available on Google’s search engine results.

Can Google police all of this? Probably not. Should it try? Debatable. But instead, Google is focusing its resources on blacklisting legal businesses and perpetuating misinformation about short-term loans for people who don’t have the credit to access money through traditional institutions.

Google has a corporate motto of “Do the right thing.” Based on Google’s new policy, its motto should come with an addition: “Unless we can make a buck.”

Jeffrey H. Joseph is a business professor at George Mason University and the George Washington University School of Business.

PREMIUM ARTICLE: Subscribe To Keep Reading

Sign up

By subscribing you agree to our Terms of Use

You're signed up!

Sign up

By subscribing you agree to our Terms of Use

You're signed up!
Sign up

By subscribing you agree to our Terms of Use

You're signed up!

Sign up

By subscribing you agree to our Terms of Use

You're signed up!
Sign up

By subscribing you agree to our Terms of Use

You're signed up!

Sign Up

By subscribing you agree to our Terms of Use

You're signed up!
Sign up

By subscribing you agree to our Terms of Use

You're signed up!
Sign up

By subscribing you agree to our Terms of Use

You're signed up!
BENEFITS READERS PASS PATRIOTS FOUNDERS
Daily and Breaking Newsletters
Daily Caller Shows
Ad Free Experience
Exclusive Articles
Custom Newsletters
Editor Daily Rundown
Behind The Scenes Coverage
Award Winning Documentaries
Patriot War Room
Patriot Live Chat
Exclusive Events
Gold Membership Card
Tucker Mug

What does Founders Club include?

Tucker Mug and Membership Card
Founders

Readers,

Instead of sucking up to the political and corporate powers that dominate America, The Daily Caller is fighting for you — our readers. We humbly ask you to consider joining us in this fight.

Now that millions of readers are rejecting the increasingly biased and even corrupt corporate media and joining us daily, there are powerful forces lined up to stop us: the old guard of the news media hopes to marginalize us; the big corporate ad agencies want to deprive us of revenue and put us out of business; senators threaten to have our reporters arrested for asking simple questions; the big tech platforms want to limit our ability to communicate with you; and the political party establishments feel threatened by our independence.

We don't complain -- we can't stand complainers -- but we do call it how we see it. We have a fight on our hands, and it's intense. We need your help to smash through the big tech, big media and big government blockade.

We're the insurgent outsiders for a reason: our deep-dive investigations hold the powerful to account. Our original videos undermine their narratives on a daily basis. Even our insistence on having fun infuriates them -- because we won’t bend the knee to political correctness.

One reason we stand apart is because we are not afraid to say we love America. We love her with every fiber of our being, and we think she's worth saving from today’s craziness.

Help us save her.

A second reason we stand out is the sheer number of honest responsible reporters we have helped train. We have trained so many solid reporters that they now hold prominent positions at publications across the political spectrum. Hear a rare reasonable voice at a place like CNN? There’s a good chance they were trained at Daily Caller. Same goes for the numerous Daily Caller alumni dominating the news coverage at outlets such as Fox News, Newsmax, Daily Wire and many others.

Simply put, America needs solid reporters fighting to tell the truth or we will never have honest elections or a fair system. We are working tirelessly to make that happen and we are making a difference.

Since 2010, The Daily Caller has grown immensely. We're in the halls of Congress. We're in the Oval Office. And we're in up to 20 million homes every single month. That's 20 million Americans like you who are impossible to ignore.

We can overcome the forces lined up against all of us. This is an important mission but we can’t do it unless you — the everyday Americans forgotten by the establishment — have our back.

Please consider becoming a Daily Caller Patriot today, and help us keep doing work that holds politicians, corporations and other leaders accountable. Help us thumb our noses at political correctness. Help us train a new generation of news reporters who will actually tell the truth. And help us remind Americans everywhere that there are millions of us who remain clear-eyed about our country's greatness.

In return for membership, Daily Caller Patriots will be able to read The Daily Caller without any of the ads that we have long used to support our mission. We know the ads drive you crazy. They drive us crazy too. But we need revenue to keep the fight going. If you join us, we will cut out the ads for you and put every Lincoln-headed cent we earn into amplifying our voice, training even more solid reporters, and giving you the ad-free experience and lightning fast website you deserve.

Patriots will also be eligible for Patriots Only content, newsletters, chats and live events with our reporters and editors. It's simple: welcome us into your lives, and we'll welcome you into ours.

We can save America together.

Become a Daily Caller Patriot today.

Signature

Neil Patel