> * Selling their debt is quite profitable for payday lenders, so they are incentivized to make bad loans. Debt collectors know that they probably can't collec

> * Selling their debt is quite profitable for payday lenders, so they are incentivized to make bad loans. Debt collectors know that they probably can't collect most of the paper they buy. This is especially true for non-exclusive paper and so they buy it for pennies on the dollar. Bad loans are one of the major losses (after employee expense and legal fees) for most payday lenders. > * Payday lenders nearly universally skip around federal and state regulations by incorporating in Indian tribal areas The Scott Tucker case shows the courts have decided not to allow the rent-a-tribe defense unless the tribe truly owns/operates the company. Having them get 1% of the profits and a couple call center style jobs isn't enough to make a payday lender be considered a tribal company anymore. Source: Wrote the lending software for payday lenders. Edit: To be clear, pennies on the dollar tends to mean less than $0.10/dollar average for debt purchasers. The loan company is losing over 90% of the principal they loaned out and are obviously not collecting the additional interest/fees that make these types of loans so expensive to pay back.