thoughts on sp this week, page-8

Warnie you raise a valid point.

An alternative scenario is to offer someone who wants to borrow $100 a loan of $2001, and require that $1901 is repaid the following day. There. Now they have made what is effectively a $100 payday loan that falls outside of the scope of the mooted regulatory regime

And this took me just five seconds to think up.

The prospect that this will lead to larger loans to circumvent regulations and therefore more debt weighin on people who can ill afford it is very real. It's the kind of perverse outcome you can get when you fiddle with the market.