Don’t Be Fooled: New CEI Payday Report Authored by Disgraced Payday Industry Attorney Caught Manipulating Academic Study

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Today, Politico’s Morning Money reported on the release of a “new Competitive Enterprise Institute report” that argues “many people will be hurt – not helped – by new restrictions on [payday] lending” that the Consumer Financial Protection Bureau has proposed. The Competitive Enterprise Institute however failed to note that the report’s author — Hilary Miller — is a disgraced payday lending industry attorney who has been caught manipulating supposedly independent academic payday lending studies financed by his shadowy payday-funded group.

Rhetoric: Hilary Miller Claims in New Report That There Is No Evidence Payday Lending Traps Consumers in a “Cycle of Debt”

Hilary Miller: “There Is No Evidence That Payday Lending Traps Consumers In A Cycle Of A Debt…” The CFPB has insisted that it develops policy based on evidence. But to date, it has not provided evidence for its own proposed regulatory actions. There is no evidence that payday lending traps consumers in a cycle of debt, that it is harmful, or that the particular numerical limits on reborrowing the CFPB has proposed will improve consumer welfare. It is essential that the CFPB study consumers in detail and determine whether these or any other proposed interventions will improve consumer welfare in the aggregate. [CEI Report, 10/5/16]

Reality: In Private Emails, Miller Admitted That Most Payday Customers Either Roll Over or Default and Don’t Pay Off Loans When They’re Due

Hilary Miller, A Chairman Of A Pro-Payday Lending Group Admitted In Private Email That “Consumers Mostly Either Roll Over Or Default; Very Few Actually Repay Their Loans In Cash On the Due Date.” “In private, it’s a different story. According a newly released email, the payday lending industry knows that most people cannot pay back their loans. “In practice, consumers mostly either roll over or default; very few actually repay their loans in cash on the due date,” wrote Hilary Miller, a key figure in the industry’s fight against regulation, in an email to Arkansas Tech Professor Marc Fusaro. Miller is chairman of the pro-industry group the Consumer Credit Research Foundation.” [Huffington Post, 11/2/15]

Who is Hilary Miller?

HILARY MILLER IS A LAWYER WHO REPRESENTS PAYDAY LENDERS AND IS PRESIDENT OF THE PAYDAY LOAN BAR ASSOCIATION

Hilary B. Miller Is The President Of The Payday Loan Bar Association. [Martindale.com]

Miller Has Represented Payday Lender Dollar Financial. “Hilary Miller, the president of the Payday Loan Bar Association, a lawyers’ group for the industry, worked closely with the researchers on their study. Miller has represented payday lending giant Dollar Financial, and is also the president of the pro-industry group the Consumer Credit Research Foundation. [Huffington Post: “Emails Show Pro-Payday Loan Study Was Edited By The Payday Loan Industry”, 11/2/15]

Miller Testified Before Congress As A Representative Of The Payday Loan Bar Association And The CFSA. “Mr. Miller. Thank you, Mr. Chairman and Members of the Committee. It is a pleasure and honor to be here today. My name is Hilary Miller and I am here both as an expert on subprime lending and also on behalf of the payday advance industry’s national trade association, the Community Financial Services Association of America or CFSA. Both the Payday Loan Bar Association, of which I am President, and CFSA subscribe to the highest principles of ethical and fair treatment of borrowers. CFSA represents the owners of approximately half of the estimated 22,000 payday advance retail outlets in the United States. CFSA has and, importantly, enforces among its members responsible industry practices and appropriate consumer rights and protections, including special protections for the benefit of military personnel. [Senate Banking Committee, 9/14/06]

MILLER IS ALSO PRESIDENT OF THE PAYDAY LENDING INDUSTRY-FUNDED CONSUMER CREDIT RESEARCH FOUNDATION (CCRF)

Miller Was President Of The Consumer Credit Research Foundation. “Hilary Miller, the president of the Payday Loan Bar Association, a lawyers’ group for the industry, worked closely with the researchers on their study. Miller has represented payday lending giant Dollar Financial, and is also the president of the pro-industry group the Consumer Credit Research Foundation. [Huffington Post: “Emails Show Pro-Payday Loan Study Was Edited By The Payday Loan Industry”, 11/2/15]

The Consumer Credit Research Foundation Is Funded By Dollar Financial Group. “In a related study released Wednesday, the Consumer Credit Research Foundation said it would be cheaper for customers to use payday lenders than to bounce checks. Payday lenders are subject to more disclosure requirements when they make a loan, the study said. A CCRF official says the foundation is funded by Dollar Financial Group, which owns several payday lending operations, and other companies.” [American Banker, 6/10/05]

MILLER WAS CAUGHT MANIPULATING ACADEMIC RESEARCH CCRF FUNDED TO MAKE IT MORE SUPPORTIVE OF PAYDAY LENDING

Hilary Miller Of The Consumer Credit Research Foundation, Funded By Payday Lenders, Was Found To Have Edited And Revised An Academic Paper They Funded To Make It More Supportive Of The Payday Lending Industry. “The payday loan industry was involved in almost every aspect of a pro-industry academic study, according to emails and other documents reviewed by The Huffington Post. The revelation calls into question a host of other pro-industry academic studies that were paid for by the same organization. While the researchers disclosed their funding source for the 2011 paper “Do Payday Loans Trap Consumers in a Cycle of Debt?” they also assured readers that the industry “exercised no control over the research or the editorial content of this paper.” The assertion was patently false, according to correspondence obtained from Arkansas Tech University through an open records request by the watchdog group Campaign for Accountability. The group subsequently shared the documents with HuffPost. The Campaign for Accountability has filed requests for documents from professors at three other universities — the University of California, Davis; George Mason University; and Kennesaw State University — who produced similar pro-industry studies. So far, it has been met with resistance. Only Arkansas Tech turned over a cache of its records. The emails show that the payday loan industry gave economics professor Marc Fusaro at least $39,912 to write his paper, and paid an undisclosed sum to his research partner, Patricia Cirillo. In return, the industry received early drafts of the paper, provided line-by-line revisions, suggested deleting a section that reflected poorly on payday lenders, and even removed a disclosure detailing the role payday lending played in the preparation of the paper. Hilary Miller, the president of the Payday Loan Bar Association, a lawyers’ group for the industry, worked closely with the researchers on their study. Miller has represented payday lending giant Dollar Financial, and is also the president of the pro-industry group the Consumer Credit Research Foundation.”  [Huffington Post: “Emails Show Pro-Payday Loan Study Was Edited By The Payday Loan Industry”, 11/2/15]

Campaign for Accountability’s Report Documents The Unethical Influence CCRF And Hilary Miller Used to Shape the Purportedly Independent Academic Research It Commissions. The report highlights how CCRF President Hilary Miller received and edited drafts of the study and encouraged the Arkansas Tech professor to omit elements that would point to the danger caused by high interest, short-term loans. Furthermore, Miller dictated and financed media strategy for the release of the study. Other key takeaways include:

  • CCRF paid Prof. Marc Anthony Fusaro at least $39,912 to prepare a report entitled, “Do Payday Loans Trap Consumers in a Cycle of Debt?” Prof. Fusaro’s co-author, Dr. Patricia Cirillo, billed the CCRF directly for her costs associated with the study.
  • CCRF chairman Hilary Miller received and edited drafts of the study, and directed Prof. Fusaro to remove negative information about payday lenders from the report.
  • When Dr. Cirillo discovered payday loan borrowers often had massive debit card overdrafts the month before seeking a payday loan, she emailed Prof. Fusaro that Mr. Miller was not “too happy” about the finding and had told her it wasn’t the “objective of the study.” Prof. Fusaro agreed not to include it in the report.
  • Mr. Miller instructed Prof. Fusaro to delete any acknowledgement of the role played by representatives of payday lenders in producing the report.
  • Mr. Miller dictated and financed the press strategy for the report. In an email to Prof. Fusaro, Mr. Miller instructed him to identify Arkansas Tech as the source for a PR Newswire release, and Prof. Fusaro agreed.

Read Campaign for Accountability’s full report here.

Read more about Hilary Miller here.

Read more about Consumer Credit Research Foundation here.

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