Google just recently made an announcement that they will be banning unsecured loans ads on Adwords and this ban will come into effect on the 13th July 2016. Basically, loans with at least 36% APR or loans that need to be repaid in 60 days are to be banned. There is a moral reason that causes Google to take the step to ban payday loan ads. They believe that unsecured loans is taking advantage of many people who live on insufficient income who cannot afford the high interest rate. They have research reports to back up their claims on this. Payday loan is now being looked upon as products in the dangerous category such as drugs and cigarettes.

The ban of unsecured loans ads on Adwords will prevent new companies from easily getting ranked on top of the search result. Only established unsecured loans companies will be able to attract customers since they are already ranked in the search result. Most of the unsecured loans companies seen on the PPC ads are those that have lesser visibility in the organic search result. The ban that Google introduced will only affect short term loans and long term loans such as home mortgage, credit cards and car loans are not affected.

In reaction to the ban, the Consumer Financial Protection Bureau has decided to come up with new rules on personal loans but they will only go ahead after 3 month comment period. The new rules will affect unsecured loans, car title loans and etc. The vice president of Advance America, Jamie Fulmer, criticized about the CFPB and claimed that the new rules they propose will destroy the short term loan industry. Advance America is a chain of payday loan shops with more than 149 branches in Michigan.

According to Fulmer, payday loan is the best option for people who needs emergency funds because most banks and other financial institutions make a lot of money from the overdraft fees. Advance America claimed that many people have stopped applying for loans from banks because they have been burdened financially before from the heavy interests that the banks charge. Tony Collins, who is a worker for a steel worker told the reporters that he just borrowed a $200 unsecured loans after he terminate his credit card because he believe that the credit cards’ interest rates are even worse.

Nick Bourke who is the director of The Pew Charitable Trusts says that there are lots of people who are looking to apply small loans to cover the temporary expenses. Bourke said that he hoped unsecured loans can make some changes on the interest rate so that the borrower won’t have to pay higher than 5% of their monthly salary and the loan term should

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