For years the payday loan industry has publicly claimed to be there to help people out of temporary financial jams. However, a report released today by the watch dog group Campaign for Accountability would suggest that the industry has been (gasp) lying all along and that most people take out payday loans to pay off other loans. Most notably, the information reveled in the report is based on the loan industries own emails.
The CFA found emails and other documents indicating that Marc Fusaro, a professor at the Arkansas Tech University’s school of business was paid $40,000 to write a study about payday loans. The study originally revealed that payday loans had a negative impact on consumers. However, it was edited by Hilary Miller, a CCRF Chairman (basically, a thug) and all negative information in the study was removed. The revised study came to the conclusion that payday loan companies were not responsible for a “cycle of debt.”
The CFA discovered evidence of Miller’s actions when they came across an email he wrote to Fusaro, saying that the industry knows — and relies — on the fact that most borrowers cannot pay back the high interest loans when they are due.
It would appear that Arkansas Tech is not the only university that was likely whoring its services out to the scummy loan industry. Three other institutions, Kennesaw State University in Georgia, George Mason University in Virginia and the University of California, Davis are also reported to have done similar studies.
Payday lenders are using Google & Bing to target vulnerable people–in states where payday loans are *illegal.* pic.twitter.com/pi3BT7y1Mg
— Alvaro Bedoya (@alvarombedoya) October 28, 2015
The CCRF is doing what it can to get other universities to keep their mouths shut. The loan shark industry filed a lawsuit against Kennesaw State to make sure they didn’t release incriminating papers. George Madison is refusing to reveal its records, perhaps for fear of getting its knee caps broken and University of California Davis is saying that it just doesn’t have many records on the studies that were done.
The payday loan industry is one of many that makes its profit on the exploitation of the poor. A study that the Center for Responsible Lending did in 2009 concluded that seventy nine percent of payday loans are taken out to pay back other payday loans.
Consumer protection groups are currently attempting to strengthen laws governing predatory loans.