payday loan APR is generally around 300% to 700%. this is not a rate set by a market, it is the claw of a predator, useful only to deal a killing blow.

Rates are set by a market.

It's interesting how even as formal christianity is in decline, the moral constructs that it popularized (distaste for usury, protestant emphasis on liberty over well-being) morph into new forms.

"Can I borrow $10? I'll pay you back $11 next week."

There, you've just committed the sin of collecting 14,000% APR.

You can't compare payday loans to things like mortgage rates or bond returns. It's a market, but it's a very different niche. It's like comparing the cost of mineral water at the grocery star to the cost per gallon of your tap water.

A lot of states have capped those rates relative to prime.

which simply reinforces the idea that it's not a market. credit cards, too, are generally capped.

the rate always maxes out the legislated cap. so it's not really dependent.

Yes the market power is also one sided, capping the rate also doesn't really help without guaranteeing more access to credit.

The best thing is:

a) UBI, just hand out a tiny bit of money to make poor people more liquid, because liquidity kills, not insolvency

b) postal banking, because even shittier than a payday loan is high fee check cashing without a pretense of debt!

Poor people hopefully at the point can save up a paychecks worth of buffer in their bank account, and don't need postal bank loans to replay payday loans.