Last fall, Campaign for Accountability (CfA) released a report, Academic Deception, exposing the payday lending industry’s efforts to produce so-called “academic research” to promote its agenda.
CfA Communications and Research Director Dan Stevens said, “The payday lending industry has manufactured at least one academic study in a desperate attempt to cover up the fact that payday loans ensnare borrowers in an endless cycle of debt.”
CfA sought records from several universities that published work on the industry, including Arkansas Tech, Kennesaw State University in Georgia, George Mason University in Virginia and the University of California, Davis.
Internal Arkansas Tech University documents reveal a close working relationship between the payday lending industry and the author of a key academic paper. The Consumer Credit Research Foundation (CCRF), an industry trade group, paid a professor at the Arkansas Tech University College of Business, nearly $40,000 to produce the study, and CCRF’s chairman edited the study and directed the professor to remove negative information. Unsurprisingly, the paper concluded payday loans are not responsible for a “cycle of debt,” an important industry talking point.
CCRF filed a lawsuit to block Kennesaw State from releasing any records and CfA is in litigation over the matter. George Mason has refused to release records and UC Davis claims to have very few.
In March, the Consumer Financial Protection Bureau announced several proposals to rein in payday lenders and protect consumers from the payday loan debt trap. In response, the industry launched a major counter-offensive, spending millions of dollars on lobbying and campaign contributions to members of Congress.
“It is not a coincidence that just as the CFPB is working to finalize regulations to protect consumers from payday lenders, the industry is relying on trumped up studies claiming the loans aren’t harmful.” Mr. Stevens said.
The report’s executive summary can be found here.
The full report can be found here.
CfA is a new nonprofit watchdog organization that uses research, litigation, and aggressive communications to expose misconduct and malfeasance in public life and hold those who act at the expense of the public good accountable for their actions.