In an Associated Press article titled “Sector Snap: Payday lenders fall on Obama proposal“  there is mention of President Elect Obama capping interest rates nationally on payday loans at 36%. We think the likelihood of Obama enforcing a 36% rate cap overnight is low and would likely be implemented in phases. There is a large demand for short terms loans and liquidity, now more than ever, and  factoring in default rates, marketing and operating costs, a 36% interest rate cap business model won’t work for most of today’s lenders.

You can almost be certain that Obama will make some changes to the payday loan industry.  The question is who will be ready to fill the gap if the changes are drastic. Whatever the changes may be, YadYap will maneuver to fill the gap that is created. As we continue to plan and test our system and business model we are doing it with two possible scenarios in mind. First that the payday loan industry remains essentially how it is now, and second that major changes take place that alter the payday loan industry landscape.

In spite of the economic woes that abound we are excited for 2009 and look forward to delivering a platform that will change the way people get short term financing, regardless of changes that may be made to the current laws.