Regulators Rebut CU-Backed Payday LoanStudy

WASHINGTON - (04/08/05) -- The FDIC issued a report Thursdayrefuting a highly inflammatory study conducted by the creditunion-backed Center for Responsible Lending which asserted thatpayday lenders tend to locate in minority neighborhoods. In ahighly charged rebuttal to the credit union-backed study, the FDICsaid its own research indicated that the number of payday lendersin African-American communities is roughly equivalent to those inthe overall population. In a letter challenging the CRL's findings,the Community Financial Services Association, the trade group forpayday lenders, called on the CRL to show its back-up data, whichis based on the study of North Carolina communities, and suggeststhe CRL's finding were influenced by the fact that credit unionsare major competitors of payday lenders. The CRL is financed bySelf-Help CU, the nation's largest community development creditunion. Credit unions, noted the payday lenders' group, have been inthe forefront in recent efforts to regulate fees and interestcharged by payday loan companies, check cashers and other creditunion competitors.