The article by Ellen Schloemer of the infamous Center for Responsible Lending epitomizes the problem with noble-sounding â€œconsumer advocacyâ€ groups. The CRL is notorious for not actually responding to legitimate issues or questions, but deflecting the conversation to push their own anti-capitalism, anti-free market agenda. The CRL is all about big government.
The blog post she criticizes, by Thomas Brown, made two simple points. The first is that in a free market, nobody is FORCED to undertake a transaction. The customers are, as Brown states, â€œâ€¦grownups, and presumably mature and rational enough to, for example, vote, drive a car, and support themselvesâ€¦fully functioning adults. They should be should be relied upon to be able to recognize a bad deal when they see on.â€
But Nanny Statists like Schloemer insist that isnâ€™t the case. Not only are people somehow magically forced into transactions, the lenders on the other side of the table are always predatory. In other words, she believes lenders are preying on people, rather than offering a product like any other, which a consumer â€œknown what heâ€™s getting intoâ€¦the decision should be left up to the individualâ€.
Brown equates to the â€œpredatory behaviorâ€ of paying four buck for a lattes, or a dollar or more for a lottery ticket. These are overpriced options that nobody is forced to use, yet they do, because they are CHOICES. Schloemer dismisses this behavior because of the size of the transaction, instead of recognizing the real point: that the transaction size is irrelevant. What matters is the free choice involved.
But thatâ€™s typical of CRL. They donâ€™t want to address the actual issue because they lose on the facts. And if the donors who line the CRLâ€™s pockets with $8 million every year realize that theyâ€™d lose on the facts, CRL would rightly vanish.
Also typical is Schloemer cherry-picking examples of consumers who made bad decisions while using bad lenders, also known as the Fallacy of the Hasty Generalization.
Schloemer also defends â€œcommon sense regulationsâ€ like the CARD Act, without ever mentioning that this legislation resulted in credit restriction for the very people who need it most. Credit card companies made changes that significantly decreased access to credit. Common sense regulations are those having to do with transparency. The moment you limit fees or how they are charged and collected, itâ€™s over-regulation. Why? Because to Brownâ€™s point, consumers are smart enough to decide whatâ€™s best for themselves. Schloemer attempts to deflect this point by pointing to CRLâ€™s â€œresearchâ€ that showed the opposite. Yet anyone who has ever read one of CRLâ€™s â€œstudiesâ€ knows these are fraudulent documents. They reflect the same â€œlogicâ€ of Schloemerâ€™s articles, sloppily throwing together data and then announcing a predetermined â€œconclusionâ€. In the past, one of CRLâ€™s race-baiting â€œstudiesâ€ was independently determined to have â€œunclear data collections methods, causation asserted upon the basis of weak correlations, and that there are significant omitted variables which bias and erode confidence in the studyâ€™s stated findingsâ€.
CRL calls itself a â€œnon-partisan, research groupâ€. Nonsense. Its agenda is to use big government to put the free market out of business. Its vendetta against the short-term credit industry has killed 40,000 jobs, putting those employees out of work, while the CRL pays itself fat salaries from the $8 million in annual contributions it receives. Rather than use that money to fund any number of start-ups dedicated to finding better free market alternatives, CRL just squanders it on themselves and on lobbyists to kill consumer choice. Less choice forces consumers to higher cost products.