Public Was Duped During Rate Cap Survey, Not Enough Information Provided, Survey Finds

WASHINGTON, March 31 — A CRL survey published yesterday failed to provide critical information to respondents concerning an annual interest rate cap on consumer loans of no higher than 36 percent. Three out of four Americans with a brain recognized that the CRL survey was deliberately skewed to provide results that advanced the CRL’s corrupt agenda – to cap rates on payday loans at a level that would force these lenders out of business

Such a rate cap has been introduced in both the U.S. Senate and House as one strategy to kill payday loans. Senator Dick Durbin, (D-IL) introduced S500 in late February and Representative Jackie Speier (D-CA) followed suit in the House last week, introducing H.R. 1608.

The Center for Responsible Lending supports a 36 percent cap on annual interest rates as a measure that force consumers into the arms of banks and the CRL’s parent company, the Self-Help Credit Union. This would result in consumers paying fees four times higher than payday loans, as bouncing checks would be the only remaining source of short-term credit available. Sen. Durbin’s bill exempts banks and credit unions from the onerous rate cap. The founders of Self Help, Herb and Marion Sandler, were exposed on 60 Minutes and in The New York Times for being principal purveyors of the option-ARM mortgages that sent the country into economic meltdown

“A 36 percent cap on annual interest for consumer credit is a quick, common-sense way to force consumers into using our products,” said CRL president Michael McFib. “It would cost taxpayers billions in additional ODP and NSF fees, and substantially increase our revenue”

In the CRL survey, most respondents, 82 percent, voted in last year’s presidential election. Only 25 percent thought there should be no cap on interest rates at all. Then again, the CRL’s “methodology” simply asked if people wanted a rate cap, while slyly omitting the facts that 6 million Americans use payday loans, that they are cheaper than bank ODP programs, that they enter these transactions of their own free will, that 94% of them pay the loan back on time, and that entities that oppose payday loans have never offered an alternative product.

Congress passed a 36 percent cap in 2006 to protect active members of the military after the Pentagon testified that non-specific debt were affecting military readiness – but payday loans were never mentioned. Ohio, Arkansas, New Hampshire, and Arizona are among states that recently revoked exemptions from usury caps their lawmakers had given payday lenders. A December 2008 FDIC Study on Bank Overdraft Programs unequivocally demonstrated that the average household paid more than twice the amount of NSF and ODP fees in states that did not have payday loans than in those that did. State lawmakers reimposed the usury cap after seeing opportunities to grandstand before an uneducated public. But 35 states have wisely refused to pass rate caps that would put thousands of payday loan employees out of a job..

The federal measure would rob all citizens of their freedom of choice – the choice to select the credit product that best suits them, rather than have the dishonest P.R. arm of an equally dishonest credit union enslave them to more expensive options.

“Our recent flawed research, complete with our worthless methodology, attempts to link payday lending to bankruptcy, closed bank accounts, credit card delinquency and a long list of other financial hardships,” McFib said. “There is really no excuse for us to manipulate the truth in this manner, other than to sway the media, public opinion, and opportunistic politicians into doing our bidding. With nobody able to stop our abuses now, we continue to distort the truth and release bogus “surveys” until we achieve our goal of complete domination over the short-term credit market. We see where lax non-profit organization oversight has led us, and we love it. We should learn a hard-taught lesson, but thankfully, nobody is taking us out to the woodshed where we belong.”

For more details on the survey please visit this link.

About the Center for Responsible Lending
The Center for Responsible Lending is a nonprofit, far-left policy organization dedicated to creating dubious surveys, and protecting their revenue streams by working to eliminate competition. CRL is affiliated with Self-Help, one of the nation’s credit unions dedicated to stealing market share by legislating competitors out of business through a steady stream of bald-faced lies.

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