Industry Calls Into Question 'Consumer' Group's Research Methods
WASHINGTON, April 7 /PRNewswire/ -- A payday lending study released
today(1) by the FDIC Center for Financial Research said that, "Despite
allegations to the contrary, we didn't find evidence that payday advance
stores tend to locate in minority neighborhoods."
The FDIC-commissioned study contradicts the conclusions of a study
released last week by the Center for Responsible Lending (CRL)(2) that claimed
the industry was targeting minorities. The FDIC study says that the number of
payday advance stores in zip codes where populations are predominantly
African-American is roughly equal to overall population percentages.
The Community Financial Services Association of America (CFSA), the payday
advance industry trade group, has challenged CRL to reveal the back-up data
from its report "Race Matters: The Concentration of Payday Lenders in the
African-American Communities in North Carolina," a study widely reported in
the media.
"Numerous questions cloud the findings of this report, so we're calling on
the Center for Responsible Lending to show its back-up data to an expert,"
said Lynn DeVault, president of CFSA. "The media as well as the public need to
know that the Center for Responsible Lending doesn't employ methodologies to
reach predetermined results."
CFSA is offering to send Dr. Patricia J. Cirillo, Ph.D., a statistician
with the independent Cypress Research Group, to review CRL's back-up data and
methodology. Dr. Cirillo's preliminary review has already found problems with
the regression analysis methodology of the CRL report.
In a letter to CRL sent on April 7th, DeVault said her organization was
stunned by the lack of credible data backing up the well-publicized report.
"Frankly, given the inflammatory tone of the report, we are surprised that
it was not backed by a more detailed, scientific and transparent presentation
of the data," DeVault wrote. "For the credibility of your organization, the
contradiction between your study and the FDIC-commissioned study must be
addressed."
(1) The study was released at the Federal Reserve System's Community
Affairs Research Conference.
(2) The Center for Responsible Lending is a "consumer" group tied to the
SELF-HELP Credit Union. Credit Unions are competitors of the payday advance
industry.
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SOURCE Community Financial Services Association of America
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CONTACT:
Steven Schlein, +1-202-296-0263, for
Community Financial Services Association of America
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