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An Attack without Merit

February 14, 2006

Payday industry tries to discredit CRL research... again

Industry dollars funded supposed academic research

A front group for the payday lending industry paid a college professor, Thomas Lehman, to write a pro-payday research report last year. The front group is Consumer Credit Research Foundation (CCRF), whose public relations director told BusinessWeek that CCRF is funded by the payday lending industry. ("This Opinion Brought To You By...", BusinessWeek Online, Jan. 30, 2006.)

CCRF has now sponsored a critique--also authored by Lehman-- of CRL's "Race Matters" paper. "Race Matters" found that African-American neighborhoods in North Carolina have three times as many payday loan stores as white neighborhoods, even when income is taken into account. The CRL study in North Carolina used strong methodology and data to ensure that all relevant factors were considered.

However, Lehman's critique contains major errors and faulty reasoning. Nothing in the Consumer Credit Research Foundation's new report calls into question the finding that abusive payday loans are a bigger problem in African-American communities.