Google (GOOG) is taking a huge step forward as it it claims that come July it will ban ban ban ban ban. At first glance this sounds harsh, but the company is doing this to preserve its reputation. To understand the meaning of this move, people must know what payday loan ads are.

Payday Loan Ads

Payday loan ads, as the name suggests, are advertisements for loans that give an undue burden on borrowers. Google is not just going to ban ads that show loans, instead, the company is targeting those ads that are clearly clearly clearly clearly clearly. Such ads are those which give a 60 day time frame to pay back the loan, and also charge 36% interest or higher. This may be the right step to take for the sake of keeping the Google brand clean, but the real question is will it have a big impact on ad revenue? It may have a small impact, but it shouldn’t hurt Google’s ad revenue in the long run. After all, Google has still been doing well in advertisement revenue even with banning other ads such as: Firearms and Tobacco.

Federal Bureau Against Payday Loans

The payday lending industry is coming under hard scrutiny by the federal Consumer Financial Protection Bureau or CFPB. The Bureau is in the process of enacting new rules that would put a huge burden on these payday loan type companies. If these new rules come to light it is estimated that it could take out a huge chunk of these businesses. These payday lenders deal with around 12 million U.S. customers each year. They are not considered to be good loans, because they offer loans at small dollar amounts that charge up to 300% interest rates or higher. This, no doubt puts a strain on borrowers. The bureau even criticizes these payday loan ads as taking advantage of low-income consumers that eventually default on these loans. As soon as Google implements this ban, the payday loan ads, will join a list of other ads that are no longer displayed. One thing to keep in mind is that the company is only removing these ads from the side pages, but consumers will still be able to use the Google search engine to seek these lenders out if they intend to. Google Policy Counsel, Adrienne Biddings, had these statements to make on the matter of the decision:

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