Front Group Busy Distorting Facts
May 12, 2009
In the last few months, the Center for Economic and Entrepreneurial Literacy and its website ECON4U.ORG have been busy distorting the facts around payday lending and its grave impact on hard-working families across the country. It is no coincidence that this flurry of pro-payday lending activity by this Berman & Co. front group has picked up lately with the recent talk on Capitol Hill of a 36% federal APR cap on high-interest consumer loans.
With prominent ads in the D.C. Metro and in the radio waves, this “astroturf” group has been busy portraying high-interest payday loans in a good light. Their favorite tactic is to play the apples vs. oranges game by comparing payday loans to other high-cost “options,” such as overdraft fees, late credit card payments, and bounced check fees.
While they are right in pointing out the high cost of all those other so-called options, substituting an abusive practice for another does not make that particular high-interest option any better for a struggling family. In fact, as our research has shown, choosing a payday loan might be the worst option of them all as it often leads to a slippery cycle of debt the consumer simply cannot get out of.
While industry front groups such as the Center for Economic and Entrepreneurial Literacy and others will continue to work their PR magic by attempting to cast abusive payday loans as viable options for struggling consumers, the fact is that in this economy the last thing hard-working families need are 400% interest loans that will only lead them deeper and deeper into a cycle of debt. The only viable and effective solution for those consumers would be to cap the APR on all consumer loans and allow them to have real options they can afford.
More straight answers: payday lending |