BuckeyeBlog

The misinformation about payday lending continues. In his Sunday column in the Cleveland Plain Dealer, Thomas Suddes engages in a variety of false attacks on payday lenders. For instance, he claims that payday lending has been “obscenely profitable.” Like every other claim in his column, though, he doesn’t back it up with any facts. If Mr. Suddes had bothered actually consulting the academic literature about payday lending, he would know the average payday lender makes a profit between 3% and 7%. How is that small profit margin “obscene”?

I guess I can’t really rely on someone like Mr. Suddes to actually be bothered with facts, though. After all, he goes onto say that that payday lenders “pillage” Ohioans. Since pillaging is the “act of looting or plundering,” I’d say that Mr. Suddes’ understanding of English is about as good as his understanding of economics. Borrowers voluntarily go to stores to get payday loans. They know the fees being charged and the time frame within which they must pay back the loan. For offering this service to people who need some quick cash, payday lenders are “looting and plundering”? That’s a pretty skewed way of looking at things.

It’s unfortunate that a columnist like Mr. Suddes can blatantly ignore the facts in his desire to smear payday lenders and the free market. But as we have seen during the debate over banning payday lending, facts are in short supply among those who are opposed to payday loans.

Tags: payday lending, Regulation

This entry was posted on Monday, October 6th, 2008 at 10:34 am and is filed under Economic Freedom. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.