| The News & Observer | |
|
|
|
|
|
|
Author: Lynn Bonner; Staff Writer Edition: Final RALEIGH -- The industry group representing payday lenders is challenging a report by a Durham-based consumer group that concluded the quick-loan outlets concentrate in minority neighborhoods. The Community Financial Services Association of America wants a statistician it works with to check the information the Center for Responsible Lending used in its report "Race Matters." And the association is touting a Federal Deposit Insurance Corp. study released Thursday that questioned the relationship between their racial makeup of neighborhoods and payday lending outlets. In a letter to the advocacy group, association President Lynn DeVault said the FDIC study "flatly contradicts" Responsible Lending's conclusions. The advocacy group's study found that neighborhoods that were at least 42 percent African-American had 7.5 payday lending stores for every 100,000 residents. Those that were no more than 4 percent African-American had 1.6 stores per 100,000 residents. The challenge to the race study comes as payday lenders and consumer advocates fight over a bill that would legalize more payday lenders in the state. Right now, payday loans are made by companies with connections to out-of-state banks. The industry wants to legalize independent operators. "As I see it, legislators, they want, I think, to see us defend ourselves," said Steven Schlein, an association spokesman. The 22-state FDIC study of industry profitability did not center on race. It made several references to the Responsible Lending study, saying it did not appear that outlets are concentrated in minority neighborhoods but that the question deserved a closer look. Keith Ernst, senior policy adviser for Responsible Lending, said DeVault mischaracterized the FDIC study. "They're shooting the messenger," he said. The trade association asked a statistician from Ohio, Patricia Cirillo, to look at the race report. Cirillo said she has questions about it but would want to know more about how the study was done. "I need a lot more before I have faith in the veracity of that study," she said. DeVault offered to send Cirillo to Durham to look at Responsible Lending's background information. Ernst said center officials would be happy to talk to her. "I have confidence in the data, and I have confidence in our methods," he said.
|
