The Center for Consumer Freedom posted some more food for thought regarding the payday lending issue on their website.

At a time when so many Americans are facing unprecedented financial difficulties, it seems out of the question to take short-term loan options away from consumers—especially when many of them have few alternatives as it is. But for self-righteous individuals who would prefer to make decisions for all of us, protecting choices (or offering more of them) is a low priority.

A consumer group has weighed in on the Arkansas payday loan debate saying this:

With the apparent success of his intimidation tactics, McDaniel joins the list of meddling elitists who couldn’t care less about soaring food prices. And the 500-plus employees of payday loan companies in Arkansas will join 80,000 other Americans at the back of the unemployment line.

So says Tim Miller of Center for Consumer Freedom in today’s Baxter Bulletin out of Arkansas.  Money quote:

“Borrowers are best served when they have more choices to pick from, not when politicians eliminate what is for many their only option.”   

The Payday Pundit has been making this point over and over.  Payday loans are an option for consumers facing unexpected expenses.   The payday lending industry has always said that  competition is the best way to keep costs down.  

The free market  consumer group–Consumer Freedom–has this to say about the situation in Arkansas:

{The} announcement on Tuesday that most payday lending companies have caved is bad news for consumers who can’t get a loan but would prefer not to pawn their television or bounce a check.

You can read the rest here.

The Center for Consumer Freedom responds to a recent editorial in Kansas’ Witchita Eagle.

“…The Eagle editorial ignored these critical facts while narrowly focusing an ad hominem critique on the payday industry alone. These lenders earn a mere fraction of what traditional banks make on service fees. In 2003, bounced-check and insufficient-fund fees generated $22 billion in bank revenues, which was equal to 18 percent of banks’ net operating income. The banking industry brought in an additional $57 billion in late fees.

“Vulnerable Kansans” are best served when they have the ability to bridge temporary stress in their budget. Instead of restricting payday lenders, government should focus on making sure consumers have the ability to choose the best borrowing option for their needs.

Tim Miller of the Center for Consumer Freedom has a great response in the today’s Capital Times to a “one-man smear campaign on the payday loan industry” by a reporter at the paper:

Dear Editor: Dave Zweifel’s one-man smear campaign on the payday loan industry is as misguided as it is ill-informed. Zweifel has spent his recent columns assaulting an industry whose worst crime is providing another option for borrowers in need of short-term assistance.

Research shows that when politicians respond to the calls of overzealous interest groups (and apparently columnists) to eliminate payday lending, borrowers are forced to turn to more expensive and less desirable options. Economists with the Federal Reserve Bank of New York found that after North Carolina banned payday loans, those who were experiencing financial stress turned to bounced checks, bankruptcies and delinquent bill pay.

Zweifel’s personal opposition to the industry doesn’t change the fact that consumers are better off when they have more options to choose from. Taking away these necessary options will only leave the borrower stranded in debt.

The Center for Consumer Freedom has a great letter to the editor in today’s USA Today responding to a recent editorial on payday lending.

“USA TODAY’s editorial on payday loans invoked the Federal Deposit Insurance Corp.’s (FDIC) stance in support of putting caps on these loans…But the FDIC’s own chairwoman authored a study in 2005 that painted a very different picture. Her report shows that payday loans can be a lower-cost option than bounced check or overdraft fees and that credit unions are sometimes not available as a reasonable alternative.”

Well said.

http://blogs.usatoday.com/oped/2008/02/keep-payday-loa.html