NEWS FLASH: Payday Lending Industry Apparently Targets Everyone

Research Demonstrates Payday Lending Customers Can't be Labeled

WASHINGTON, Feb. 21 /PRNewswire-USNewswire/ -- Payday lenders called a new study that claims to have "conclusive proof that conservative Christian Americans are a prime demographic target of the payday lending industry" preposterous.

This study, "Usury Law and the Christian Right," comes on the heels of prior allegations that payday lenders locate in communities with high populations of military, women, Hispanics, the elderly, African Americans, recent immigrants, young people, Native Americans, social security recipients, veterans, the poor and households with a median annual income of $48,000. A recent BusinessWeek article said payday lenders are now targeting more affluent neighborhoods.

Analysts estimate that 19 million U.S. households used a payday loan in 2006.

"Our industry has been accused of 'targeting' the military, minorities, women, immigrants, the elderly, the poor, the middle-class and now conservative Christians," said Darrin Andersen, president of the Community Financial Services Association of America. "Who's left? This is preposterous."

"The only common denominator is that our customers are people with steady sources of income and bank accounts who sometimes have unexpected or unbudgeted expenses that require cash between paychecks. Our customers are reasonable people who appreciate having a lower cost option that allows them to avoid bouncing checks or accruing late or overdraft protection fees," Andersen added.

"While critics of the industry assign labels to our customers in an attempt to further their political agendas, the fact is that we provide services to a broad cross section of Americans because there is a broad demand for the financial service we provide," said Andersen. "Our customers represent a broad demographic segment and cannot be grouped based on race, sex or religion."

Andersen said the recent report by Christopher Peterson and Steven Graves, which purports to show that payday advance businesses target Christians, was little more than, "advocacy masquerading as scholarship," and questioned what accusations the industry might face next from opponents of consumer choice in financial services.

The report's methodology, logic and conclusions were also called into question. Rather than empirically identifying people of faith, it constructs a 'Christian Power Index,' compares the number of payday advance locations with coffee shops and fast food restaurants, relies on 'Bible Belt' stereotypes and fails to account for the popularity of payday advances in states that do not fit the authors' preconceived conclusion, including California, Ohio, Montana and elsewhere.

Andersen said that research shows payday advance customers to be middle-income, educated, working families, more than half earning between $25,000 and $50,000 annually, 58 percent having attended college, and one in five having a bachelor's degree. He added that payday advance customers are not the "un-banked," as 100% have a checking account at a credit union or bank, but turn to payday lenders for low dollar short-term credit needs.

Contact: Steven Schlein or Lyndsey Medsker 202-296-0263

About the Community Financial Services Association of America

The Community Financial Services Association of America (CFSA) (http://www.cfsa.net/) is the only national organization dedicated solely to promoting responsible regulation of the payday advance industry and consumer protections through CFSA's Best Practices. As such, we are committed to working with policymakers, consumer advocates and CFSA member companies to ensure that the payday advance is a safe and viable credit option for consumers.