There has been a good deal of moralizing and high dudgeon about how those storefronts that make payday loans are ripping off poor people who are denied loans elsewhere. It is claimed that the interest charged by these establishments is beyond usurious. Now regulators are beginning to hyperventilate in a similar vein at banks (more here).
I have a very simple solution to this problem of people with no skin in the game making rules for those to whom fate(?) has consigned such a depressed lifestyle. We start with the most acceptable presumptions that everyone should be able to borrow money in a free society that operates (more or less) free markets. And everyone should be free to lend money at terms that they consider acceptable.
My simple solution is that all such regulators and legislators seeking to inhibit the poor from obtaining payday loans be required to remit a goodly portion (say, one third) of their investment portfolios into the capital asset pool(s) of payday lenders who will now lend under the newly prescribed, and presumably more favorable, terms that are deemed fair for that cohort of borrowers. The regulators will then have skin in the game, and obtain a fair return for their lent dollars. This will guarantee the most equitable terms to all concerned, and no further guidance or considerations of fairness would then be necessary in the evaluation of the new regulations.
(Hmmm..., does this approach have wider applications in the making of sausages?)