MOUNTAIN VIEW, Calif. – Google is doing its part to make sure its users don’t sign up for high-interest payday loans.
In August, the tech company started removing financial apps from its store if they were deemed predatory. Apps that offer personal loans with an annual percentage rate of 36 percent or high will no longer be allowed in the app store.
“Our Google Play developer policies are designed to protect users and keep them safe,” a Google spokesman said to The Wall Street Journal . “We expanded our financial-services policy to protect people from deceptive and exploitative personal-loan terms.”
A payday loans is a relatively small amount of money lent at a high rate of interest on the agreement that it will be repaid when the borrower receives their next paycheck.
These types of loans are legal in most states, so what gives Google the authority to ban them? An expert at Metro State University says it’s really not Google’s responsibility to protect users from this, but it does help the company in the long run.
“This is not a corporate responsibility practice,” said David Bechtold, an associate professor at Metro State. “This is a good strategic practice in their mind. This is not doing well, this is doing smart. Because at the end of the day, if their practices turn away the people they want to hire, people they want to sell to in total? That's a bad business practice.”
Others are comparing Google’s decision to that of stores that have stopped selling e-cigarettes. Payday lenders are obviously not very happy about it, because it could force them to offer lower rates.
Color of Change, an African-American advocacy group which pushed Google to impose the ban, also plans on pushing for a similar ban from Apple. However, Apple says it already periodically reviews its app store guidelines to address any new, possible issues.