Payday Pundit

Hidden Consumer Loans: An Analysis of Implicit Interest Rates on Bounced Checks by Mark A. Fusaro, Department of Economics, East Carolina University, finds that the median interest rate on bounce protection loans is in excess of twenty times that of payday loans. 
Fusaro writes, “Payday lending attracts attention for its high interest rates, but bounce protection loans are much […]

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An article in the New York Sun reports, “Credit card companies offer residents of majority black communities a lower credit limit than residents with the same profile who live in white neighborhoods, an economist at the Federal Reserve Bank of Boston has found.”
The study, “Credit Card Redlining”  is by Ethan Cohen-Cole.
Cole found that a 1% increase in the percentage […]

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Ohio’s Buckeye Institute asks, Is the Center for Responsible Lending being Hypocritical? They write:
 ”…there is research indicating that CRL is being funded by organizations that have business practices are not much different than those being used by payday lenders. While CRL’s research should be examined on its own merits (and it has been found lacking when […]

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Interesting discussion on a the Volokh Conspiracy blog prompted by a column, “In Defense of Usury” in the Wall Street Journal by Dean Karlan and Jonathan Zinman. 

Several of the commenters raised the challenge that nothwithstanding the authors’ conclusions, very high interest rates are still “immoral” and should be banned. But I don’t really follow the logic of the […]

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…compared to bounced check fees and overdraft protection.  The payday lending industry has been making this point for years, but now economists are catching up.  This article on the blog of the Left-wing magazine Mother Jones discusses research by East Carolina University Professor Marc Anthony Fusaro.   
From the article:
     Fusaro looked at overdraft protection as a form of a short-term loan and found that people […]

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The Center for Responsible Lending continues to promote a report, “Financial Quicksand” that reaches conclusions about the payday lending industry that have been debunked by Veritec Solutions, the data gathering company whose numbers CRL misused. 
Veritec found that conclusions made in the CRL Report are not an accurate reflection of statistical information.
False conclusion #1: Ninety percent of payday lending revenues are based […]

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Terry Kibbe of the Consumers Rights League weighs in.    From her piece in today’s Los Angeles Times:
“The Center for Responsible Lending and other so-called consumer advocacy groups rely on shoddy research in stirring gender, racial and class sensitivities to make the case against payday loans, as they did during their successful crusades in Georgia and North Carolina […]

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Communities affected by natural disasters are more resilient and less likely to face foreclosure if they have access to payday loans, says a working study, “Payday Lenders: Heroes or Villains?” by researcher and University of Chicago faculty member, Adair Morse.
From the press release:
The study finds that payday lenders provide critical capital to people in disaster-struck communities. […]

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Results from a survey by American Pulse found that 50.8% say they live paycheck to paycheck.

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Marc Kilmer, a policy analyst with the Columbus, OH-based Buckeye Institute for Public Policy Solutions has written a piece critical of Ohio’s legislators.
Ohioans did not send legislators to Columbus to make their personal financial decisions for them. Considering the poor state of Ohio’s budget, it seems ironic that some in Columbus think their time is best spent […]

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