Well, the CRL is at it again! Once again, they are attempting to sway gullible public policymakers and the public with a bogus study that lacks sound methodology and draws on sources that have been repeatedly debunked.

First, a quick reminder. The Center for Responsible Lending is a front organization for the Self-Help credit union, which wants to put payday lenders out of business so they can capture their customer base – and make them beholden to Self-Help’s onerous overdraft protection program. Whereas payday loan customers paid $6 billion in fees in 2008 in exchange for 154 million transactions, Bretton Woods Inc, a bank strategy consulting firm, estimated that consumers overdrew their accounts 1.22 BILLION times in 2008, allowing banks and credit unions to collect more than $35 BILLION in fees.

The average transaction size resulting in an overdraft fee was $60. The average overdraft fee was $27. You can get a $60 payday loan in most states for $9.
So CRL’s motive is to suck consumers dry via overdraft fees. Keep that in mind.

CRL’s methodology for their “studies” has been repeatedly debunked. Their work is clumsy in the extreme, designed to mislead, and lacks any support by any independent analyst. Simply put, Dr. Thomas Lehman, an Indiana Wesleyan University economics professor, said their studies “contain severe weaknesses and presents conclusions that are overstated at best, and misleading at worst…perhaps motivated by an ideological bias against the PDL industry”.

Gee, ideological bias? Let’s add “financially motivated”.

Anyone who is truly interested in discovering how little respect the CRL has for intellectual honesty, and who doesn’t wish to be taken for a fool, need only read pages 6 and 7 of this new “report”. The CRL compiled its data from Florida and Oklahoma only, states which are not representative of the entire base of payday loan consumers, fails to account to differences among users across the entire US demographic, and does not even provide the true loan-level data needed. This sampling bias, a rather – shall we say — fundamental concept of statistical analysis, is something the CRL conveniently dismisses in every study. They repeat their “mistake” here, which immediately renders the entire study and its conclusions void.

They even admit to their faulty methodology on the next page! “Our next step is to determine what share of total payday loan volume represents “churn”—which we define as any loan made within the same two-week period in which a previous loan is paid off. This two week period serves as an indirect method for determining whether subsequent loans were likely taken out in the same pay period. [Emphasis mine]

Indirect method? Likely taken out? Are they kidding? This is supposed to be rigorous statistical analysis! These are people’s lives the CRL is meddling with!
This “methodology” is almost as sloppy as the inept study conducted by Dr. Stephen Graves.

And to top off this clown show, when one rifles through the Notes at the back of the report, we find that the majority of data was culled from other CRL reports! Talk about fruit of the poisonous tree!

It’s really getting tiresome having to dismantle this insidious organizations propaganada machine time after time. But as long as they insist on befuddling the masses with its mercenary tactics, I’ll be here to offer enlightenment.

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