Here’s the latest press release from FTPLS, debunking the APR myth.
FTPLS Counters CRL Myth that Consumers Use APR to Choose Best Product
Payday Loan Advocacy group debunks myth that consumers use APR. Studies prove that consumers use a flat fee to choose credit products.
FOR IMMEDIATE RELEASE
PRLog (Press Release) – Jun 23, 2009 – Los Angeles, CA – June 23 – The Fairness to Payday Lenders Society has reviewed the The Center for Responsible Lending’s new brief, “APR Mattersâ€, and declares it yet another misleading tactic to limit consumer choice, and force borrowers into more expensive options affiliated with the CRL.
The document perpetuates myths about payday loans. State lawmakers and even voters have embraced payday loans – selecting the option based upon the fee charged, not on Annual Percentage Rate.
Contrary to the CRL’s claims, the typical payday borrower is not in debt long term, nor caught in a cycle of back-to-back transactions that end up costing several times more in interest than the original amount they borrowed. Even though the federal Truth-in-Lending Act requires that the interest rate charged on any type of credit be stated as an effective annual interest rate – even if the loan does not last a full year – borrowers do not use APR to comparison shop. More than one independent study has conclusively proven that customers choose short-term credit products based on the flat fee charged, just as they compare the prices of any other product.
“Telling policy makers that APR is the method by which consumers choose credit product is just another tactic the CRL uses to mislead. The CRL is nothing more than a front for the Self-Help Credit Union, an institution that collected billions in overdraft fees from its customers, and which wants to do the same thing to payday loan customers by getting payday loans outlawed,†said Jackson Strain, spokesman for the FTPLS.
“APR is a measure of the time value of money. If the CRL insists on using APR for transactions, then it should be consistent. The cost of a taxi from Raleigh-Durham airport to the CRL’s offices is 192,720%, and a $100 room at a hotel is 36,500%. It’s bad logic and simply a way to try to justify the kinds of lies the CRL has been repeatedly caught making.â€
The CRL’s repeated use of misleading and inaccurate studies has been documented several times. Dr. Thomas Lehman, Associate Professor of Economics at Indiana Wesleyan University, debunked the CRL’s “Race Matters†as suffering from sampling and ideological bias as well as flawed in its regression analysis. Other academics have repeatedly pointed out the CRL’s “studies†on minority usage of loans in Los Angeles suffer the same problems.
“The CRL wants Congress to ban payday lenders,” said Strain. “They are in direct competition with them, after all. And since the CRL insists on using a measuring system that customers never use, why not ask Congress to pass a law instituting the metric system?
The Fairness to Payday Lenders Society supports sensible consumer protection that allows consumers access to credit products they need, when they need them, without eliminating options. These lower-cost options are essential as we work to get our financial system and our economy back on track.
Website: http://ftpls.blogspot.com
# # #
The Fairness to Payday Lenders Society supports sensible consumer protection that allows consumers access to credit products they need, when they need them, without eliminating options.
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38 users commented in " Payday Loans: FTPLS to CRL – Suck an Egg "
Follow-up comment rss or Leave a TrackbackFrom your “editorial policies” page:
“If you believe that something you read on BNN is offensive or factually incorrect, then please leave a comment about it on the post in question. You do not need to register at the site to write a comment.”
Meyers is quoting press release from a group that doesn’t exist beyond a Blogspot page that looks like it was created last Tuesday (June 23).
The Fairness to Payday Lenders Society is a consortium of several dozen payday loan operators, spread across several states. The Society is not a public company. It is not required to register with any state authority.
We speak in defence of our industry, which is frequently and unfairly maligned by those opposed to consumer choice.
If you have a comment or would like to discuss the issue, you are welcome to send us an email at: bizmaven9@gmail.com
Jackson Strain
Spokesman
You can call it anything you like, but it’s nothing more than a web page that’s three days old. As for you, Mr. Strain, you seem to exist as an email account on a real estate site, and nothing else.
BNN– if you’re reading this, please check it out. One of your bloggers seems to be making up stuff because he doesn’t have any facts to support his arguments.
Once again, Mr. dePloomb, you are welcome to contact me at the above email address, or provide me with a phone number to contact you with.
I only talk to real people. You’re the spokesman for “a consortium of several dozen payday loan operators, spread across several states.” Howcum you only come up on Google as a email address at realestaterama?
BNN?
The FTPLS blog was created a few days ago by Lawrence Meyers. This is beyond dispute.
http://www.blogger.com/profile/06201589069049764042
The APR is a useful tool for comparing loans which you have access to. It is especially useful for comparing home loans, many of which have “origination fees” combined with a relatively low APR, and the requirement that all the costs, combined, be stated as an APR, helps consumers see which loans actually cost less money. When it comes to payday loans, however, there is no such situation so it is easier for customers to judge the value of the loan by the actual dollar cost.
And the fact is that most payday loan customers, due to their relatively poor credit rating, do not have access to loans at credit-card or personal-loan rates, so comparing the APR of payday loans to those loans is fruitless. Yes, payday loans are many times more expensive, per day or per week, but that doesn’t mean that they aren’t a good option for people who can’t access those other forms of credit. It all depends on each person’s individual circumstances.
And the fact that payday lenders have to charge triple-digit APRs to make the small-dollar short-term loans doesn’t mean that they are making a huge return on their investment, as Lawrence Myers clearly showed in one of his previous articles. They are only collecting interest on a small amount of money for a short period of time, so about 90% of the interest or fees charged goes to offset the costs of issuing the loan and covering for those loans which are defaulted on.
So the critics of payday lending are really rebels without a cause, using the age-old superstition that a loan can be judged by its APR as an excuse to criticize, whether for personal or economic reasons.
I’m not sure, however, that CRL’s motives can be definitively ascertained as being economic, to eliminate the competition, and I think that to assert that may be an unreasonable accusation.
I also think the critics of payday lending may be correct in their assertion that the average borrower needs more than one pay period to pay off the loan, and thus either rolls over the loan or gets back-to-back loans which do end up costing them considerably more than the fee for a single loan. What I think they fail to understand, however, is that payday lenders by and large are operating under very narrow exemptions to state usury laws, and due to regulations are not able to offer installment payday loans where customers who know from the start that they won’t be able to repay the entire loan on their next payday can leave several post-dated checks to repay the loan over several paydays instead of one. Installment payday loans could be offered at a lower APR than single payday loans because the lender would be collecting interest for a longer period of time without incurring the costs of having to process rollovers. And the poor customers would be spared the stress of repeated trips to the store or stores to extend the loan process.
We need to debunk the APR myth so there can be a free market in loans just as there is a free market with other goods and services. There should be strong regulation prohibiting deceptive advertising and hidden fees, but beyond that freedom works best.
Dear Mr. Schultz–
Thanks for your detailed expalnation of why payday loans may not be as awful as people say they are. I don’t have the background to argue with you. But I wonder why if the facts are so strong, Lawrence Meyers (not Myers) has to make up a trade org. and pretend to be somebody named “Jackson Strain” to make his case. Isnt it just the B AD STUFF you have to lie about in order to sell?
Jackson –
I suggest you not engage. dePloomb is either a low-level CRL stooge or, because he seems more interested in me than in payday loans, one of two cyberstalkers I have.
Seeing how you’ve given him all of your contact information and he refuses to contact you, I suspect it is the latter.
As for Mr. dePloomb, if he’s bothered to read any of the several dozen articles I have written regarding the payday loan industry, he’d recognize that there is no need to make up anything.
Mr. Meyers–
Then why are you making up a fake organization?
Anyway, if I wanted to talk to “Jackson Strain” I would just email you, as you are clearly the same person.
And, by the way– I have said clearly that I have no opinion about the payday loan industry other than vague repugnance. I suppose it’s better than loansharks, which is where your customers would go if you were put out of business. THe good thing about you, I suppose, is that you don’t actually break your customers legs.
But I am interested in liars and bullies, and so I am interested in you.
How interested are you?
Interested enough to keep reminding you that you are a liar anbd a bully. People like you are bad for everybody else.
So you plan to continue posting here and on all my articles?
Do you plan to continue to be a liar and a bully?
So you do plan to continue posting here and on all my articles?
Or are you suggesting you have some terms that you demand that I abide by?
I make no demands.
So you do plan to keep posting here and anywhere else I write articles?
WHy do you ask?
It just seems like you won’t leave me alone, even if I ask.
Have you asked?
I am now. LEAVE ME ALONE, Ian.
And that’s a formal request. Better check your Email.
[...] » Payday Loans: FTPLS to CRL – Suck an Egg – Blogger News Network [...]
Thanks for taking down the defamatory web page. I notice that you’ve obliterated “Jackson Strain” as well.
As I said in my email to you, Larry, I will leave you alone as long as you leave me alone: I don’t want to see my name linked with yours in any way, however tenuous. God forbid anybody think we’re friends.
And, by the way, before this started this afternoon, I took screen shots of every relevant page.
I’m done here. I’ll even let you have the last word.
And this constitutes the fourth time you have contacted me, after being asked to cease and desist.
LEAVE ME ALONE.
Norman, as the senior editor of BNN, I think it is time to make a couple of observations. Number one – Norman dePloom is clearly not a real name, also your email address has clearly been generated just for mischief. Your IP address tells a great deal.
One has to wonder why people feel the need to hide behind a norm-de-plume?
My name is Simon Barrett, I am proud of it. I do not need to hide behind any skirts. But there again, I stand behind what I write. I have nothing to hide. People may not agree with my ideas. Indeed, I love bto provoke the thought process.
Norm, take the high road, tell us who you are, and how life is in Phili? I understand there are many great educational opportunities in Phili, personally I would recommend Drexel.
Pay Day Loans are without doubt a controversial subject.It is easy to talk about how outrageous a 500% APR is. This is something that any sensible person would hone in on. But when you take the time to examine the industry, the story is so different. The loan is short term, usually less than 14 days. The person takes a $100 loan, and has to repay $110.
When you look at the credit card world, it is far worse than Pay Day Loans. The APR has little to do with actual charges. The revolving credit scheme creates a very ugly situation. Between late fees, cash advance fees, and interesting calculations involving dates , it is far more insidious than that of the Pay Day loan industry.
I would also like to point out that to the best of my knowledge PDL is one of the few financial industries that did not line up for government hand outs. Banks, insurance, investment companies, all came begging, cap in hand. ‘Sir, please may I have some more’. I did not see that from the PDL.
A PDL is a high risk loan. No collateral is involved, but people need money to live.
To shut down this avenue of short term money is akin to revoking all of the Visa or Master Cards out there.
How many Credit Card holders are living ‘pay check’ to ‘pay check’? The stress though is not about about a $100 loan to help with the rent, or put gas in the car.
The average Credit Card debt is considerably larger than the average Pay Day loan.
With the banking system grovelling for forgiveness and working capitol to maintain business, one has to wonder what the hell they teach in these high price universities?
Ivy Leaf? Poison Ivy more like! I think it is time that we recognized that MBA stands Must Be @sshole.
it seems to me that most of these ‘experts’ likely chose wrong in grade 9, Home Economics would have been a better choice, rather than global economics.
Busted.
Mr. Barrett –
Regardless of the identity of Mr. dePloomb, a number of questions remain that, as the senior editor, I would think you would be troubled by. Namely:
1. Why is there no other evidence on the entire web of either the FTPLS or of Mr. Strain?
2. Why is Mr. Strain’s office number actually a fax machine, and why has he been posting here with offers for Mr. dePloomb to contact him but not even bothered to make a correction of any sort?
3. Why was the FTPLS blog created only a few days AFTER its existence was questioned here, clearly by Lawrence Meyers himself (he has since hidden his profile information but it was plainly available earlier today), and why has Mr. Meyers not bothered to mention that he is either IN this society, or has, at the very least, been hired by them to run their blog?
Throw everything else aside – pseudonyms, “cyberstalkers”, the virtues of PDLs – and you are still left with these questions, which neither Mr. Meyers nor “Mr. Strain” have deigned to answer.
If you sincerely want BNN to be a place of journalistic integrity, how can you not at least be slightly curious about the answers to these questions?
Does none of it seem the least bit suspicious to you?
First I couldn’t register because of a message “User registration is currently not allowed.” so please don’t flame me for being unreal.
With that said I don’t see any suspicious activity at all. I have belonged, currently belong and I’m sure will belong in the future to small organizations that do not have a staff, or even a phone. That’s not guilt.
To address some of the questions:
1. Why is there no other evidence on the entire web of either the FTPLS or of Mr. Strain? PERHAPS IT IS NEW?
2. Why is Mr. Strain’s office number actually a fax machine… There is no such thing as a line being a fax machine. A fax machine on a line that answers after a certain number of rings is very common. I’m surprised a new organization can afford a phone line and a fax machine. Kudos to them for providing a number. Given the nuttiness of some of the posts I’ve read so far I wouldn’t give out mine.
3. Why was the FTPLS blog created only a few days AFTER its existence was questioned… Does it make a difference what sequence you do things in? It seems to be a small, new organization. So what?
The arguments put forth here in defense of payday lending are excellent. Let’s discuss those instead of the age or size of the FTPLS.
Glenn Burton
Thank you, Mr. Burton, for saying what was obvious.
“Mr. Burton” –
Any reason you completely omitted in your rather specious rebuttal (the Iowa CCI attempted to “censor” a press release from an organization so new and obscure that there’s no mention of them anywhere else on the web, and so marginal that they don’t even have voice mail or a separate fax line, and they use blogspot for their official website?) the most notable element of all, that Mr. Meyers himself created the FTPLS blog?
The dePloomb family appears to be psychotic.
Didn’t he use the word cyberstalker in there somewhere? Sounds better.
I am going to go with psychotic cyberstalker, just to cover all the bases.
Note From Editor
I have contacted both dePloom’s in an attempt to unravel this situation. Needless to say these anonymous people are using ‘generic’ email addresses and as of yet have failed to return my email.
When people hide their identity one has to question their credibility, and indeed motives.
Simon Barrett (real name)
A Couple of Points: When it comes to payday loans, not one (ok, maybe one) consumer looks at an APR and compares the loan to a similarly priced loan product.
TILA is a law that we must abide by b/c that’s how our system works. Mortgage notes are 25 pages loan and sometimes longer, so an APR on a mortgage note can be very helpful b/c of all the fees, hidden or not. Payday loans are typically 2 pages long and the TILA box is in large, bold print on the front page.
Payday loans are expensive, but they’re cheaper than: bouncing checks, not having a (broken) car to drive to work or getting your electric cut off. It’s also a very easy product to understand. You borrow $300 and pay back $345 in two weeks. If you don’t have $345, you can pay back a minimum of $45 and extend for another month. How is an APR going to explain what’s going on better than I just did?
Do payday lenders like when you pay the minimum, sure they do. Just like credit card companies and any bank out there. That’s how they make money.
We want all citizens to vote for our legislators and president, but we can’t expect them to understand the terms of a very straight forward product?
PAYDAY LOANS STINK! The political climate is changing and their end is near. Their store fronts are becoming more and more dangerous places to work. Their disgruntled clients are getting smarter, banding together and learning how to fight back. Payday Loan companies offered some valuable service to the community, but for too long, we’ve been playing by the unfair rules written by these powerful companies. PAYDAYLOANSSTINK.COM welcomes them to exist, but its time that the playing field is leveled. Payday Loan companies have proliferated through intimidation and misinformation for too long. PAYDAYLOANSSTINK.COM exists to give you – the consumer & the employee – the information you need to gain the upperhand. To escape their devious cycle-of-debt trap! PAYDAYLOANSSTINK.COM invites every one affected – including employees of the industry – to join in the discussion and learn from each other.
- JUST STOP PAYING! Always remember to put a Stop Payment on your check. It forces them to stop charging interest and negotiate a payment on your terms. Not theirs!
- Did you know that by sending them a simple Cease And Desist letter by certified mail, you can get all of their harassing phone calls – to you, your work and your family – to stop?
- And did you know that many Payday Loan store fronts are blatantly breaking laws every day? That a simple letter to your City Council or your Attorney General could help to shut them down? Or even get some of your money refunded?
- THE “EPP” EXTENDED PAYMENT PLAN – Available at nearly 70% of the nation’s Payday Loan stores, but yet you are never told about the EPP – “Right now your Payday Loan store is offering a three-month, interest-free payment plan for anyone who has a current loan! Save hundreds of dollars in interest. That’s right! Whether it’s Advance America, Check Into Cash, Quik Cash, Check N Go or some other Payday Cash Advance company, just tell them you are tired of paying interest and would like your FREE EPP. The Extended Payment Plan. Ask for it today before it’s gone!”
PAYDAYLOANSTINK.COM thanks you for taking the time to read this quick comment. Our new site has much more detailed information available regarding the topics above. As well as – “Small Claims”, “BBB & FTC Complaints”, “Arbitration Agreements”, Community Forums & more!
Oh, please. “Payday Loans Stink”? I’ve read your website. Sounds like you didn’t properly plan on how you were going to pay off your loan. Turning your lack of responsibility back onto the industry doesn’t give you much credibility — not to mention you are too cowardly to reveal a name.
Offering advice to people, as you do, on how to avoid meeting their obligation is what stinks.
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