Regulated small-dollar installment lenders do not operate within Arkansas, but they do in all six bordering states. We can measure the effects of Arkansas' 17 percent interest rate cap because Arkansas residents obtain installment loans only from out-state lenders. On average, Arkansas residents...

In the U.S., Arkansas has the lowest interest rate cap on small-dollar installment loans, 17 percent. No small-dollar installment lenders operate within Arkansas, while they do in all six states bordering Arkansas. These facts provide a natural experiment to examine the effects of a binding...

Economic theory predicts that a binding interest-rate cap decreases credit availability for high-risk borrowers. On March 23, 2021, Illinois imposed an all-in interest-rate cap of 36 percent per annum for loans under $40,000 from non-bank and non-credit-union lenders. We use credit bureau data...