Head of Payday Lending Industry Trade Group Cited Study Paid for by Consumer Credit Research Foundation to Argue Restricting Payday Loans Makes Consumers Worse Off
Dennis Shaul Cited Academic Study Commissioned by Consumer Credit Research Foundation That Found Reducing Payday Loan Access Leads Consumers to Inferior Substitutes Like Overdrafts and Late Bills.
Dennis Shaul, the head of the Community Financial Services Association of America (CFSAA) wrote in an op-ed, “A law in Oregon that capped short-term interest rates “reduced access to payday loans in Oregon, and … former payday borrowers responded by shifting into incomplete and plausibly inferior substitutes,” one study found. “Most substitution seems to occur through checking account overdrafts of various types and/or late bills,” with fees greater than that of payday loans. States that have banned payday lending outright, such as CRL’s home state of North Carolina, have seen similar results.” The academic study he cited was paid for by Consumer Credit Research Foundation. [Dennis Shaul Op-Ed, The Hill, 2/3/16, Jonathan Zinman, “Restricting Consumer Credit Access: Household Survey Evidence On Effects Around The Oregon Rate Cap”, 12/2008]
Consumer Credit Research Foundation (CCRF) Is a Payday Lender Funded Organization That Has a History of Editing the So-Called “Academic Research” it Commissions
Funded by Payday Lenders, the CCRF 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]
CCRF Is Funded by Dollar Financial Group, a Major Payday Lender.
“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]
Trade Group’s Research Committee Chair Works for the Payday Lender That Funds Organization Responsible for Commissioning This So-Called Academic Research.
The CCRF is funded by Dollar Financial Group, Inc., a major payday lender and member of the CFSAA – again, the industry’s special interest trade group. Coincidently enough, a Dollar Financial Group executive sits on the board of the CFSAA and just so happens to chair its “research committee.”
Campaign for Accountability’s Report Documents the Unethical Influence CCRF Has 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.
- Miller instructed Prof. Fusaro to delete any acknowledgement of the role played by representatives of payday lenders in producing the report.
- 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.