Center For Responsible Lending Irresponsibly Taints Journalism

Jumping off that same cliff

... is not important to the CRL. It certainly should be to you!

Jay Miller of Crain’s Cleveland Business reports that given the choice, he’d rather be a lemming.

Jump off the cliff like everyone else and buy the Center For Responsible Lending’s (CRL) propaganda, Jay. Or, you might actually take the few seconds necessary to think about cash advance loans and how they really work. I trust you’ll see that when it comes to predatory organizations, you’re barking up the wrong tree.

Legislation that was supposed to “curb high interest-rate payday lending” hasn’t worked, according to Cleveland’s Housing Research and Advocacy Center. Apparently, they found that while the number of lenders decreased after recent legislation, those remaining have found ways to apply their services under different laws.

It is Mr. Miller’s contention that this is in some way illegal. Furthermore, he decries interest rates on the new personal loan products offered in Ohio. Surprising no one, he quotes the theoretical maximum that applies to almost nobody. Once again, these are typically two-week loans. You pay $15-$25 per $100 loaned; you pay up to 25 percent interest, NOT 680 percent annually. There is not “annually” here; it does not apply. Lenders in Ohio are currently charging $26.10 per $100 loaned, so over the two-week term of the loan, that’s a total of 26.1 percent paid. This isn’t difficult math, but the CRL isn’t a “thinking” kind of organization.

Small Loan Act = small loans

Cash advance lenders in Ohio are now licensed under the state’s Mortgage Loan Act or the Small Loan Act. This traditionally regulated second mortgage lenders and finance firms such as Citifinancial, Household Finance and Wells Fargo Financial, writes Miller. However, if the services offered by short-term lenders qualify under the Small Loan Act (they are small loans), why shouldn’t they fall under the domain of said act? What’s your main problem, Mr. Miller?

Miller makes a point of exclaiming that “the new payday lending law restricted lenders from charging more than 28% interest.” Oh, good, then there’s no problem. $26.10 per $100 loaned is a 26.1 percent charge. Again I ask, what is the problem?

Don’t feed the monster

So the Housing Research and Advocacy Center – and how they missed the CRL’s completely twisted view of mortgage lending is beyond me – has made a recommendation. They advise that Ohio’s General Assembly increase cash advance terms to 90 days and shift lenders to the domain of the Ohio Consumer Sales Practices Act.

I say that if the Housing Research and Advocacy wants to be treated like a reputable organization, they should refuse to serve the master whose whips are at their backs. Martin Eakes‘ empire (Self-Help, Inc. and the Center For Responsible Lending) works hard to discredit cash advance lending, largely because it offers competition for some of his own products. Considering his checkered history with subprime lending, nobody should believe anything the CRL, Self-Help or Martin Eakes has to say until he renounces his past publicly, and commits to fixing the carnage he has wrought upon the present. Then and only then will stories like this by Jay Miller in a Cleveland business publication have any real meaning or public interest.

As it stands here, Jay Miller is only feeding the CRL monster.

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