I started thinking about title loans several years ago, and one of the arguments that you see over and over is that we need to prohibit title lending because it causes a lot of people to lose their car and their only way to work. Title loans are short-term, high-cost, small-dollar loans that are secured by a vehicle that the borrower usually owns outright. They are often used by people who are already in a financial bind, so academics, policymakers, and consumer advocates are concerned about the distress caused by borrowers losing their way to work.
One time I asked a consumer advocate what evidence we had of this phenomenon, and I was surprised that we had none. Despite its preeminence in the discussion, no one had measured how many people were actually losing their means of getting to work. Policymakers relying on this justification were regulating blindfolded, so I began to work on the issue.