A recent opinion piece in The Hill by the American Financial Services Association’s (AFSA) Bill Himpler, called out the Center for Responsible Lending (CRL) for the release of a poll that purported to show that a bipartisan majority of American Consumers supported a 36 percent APR cap on consumer loans.
Himpler points out that CRL’s polling rigged the outcome of the poll by “asking [consumers] an incomplete question”, namely:
“As you may know, the average annual interest rate on payday loans is 391 percent. Would you support or oppose a proposal to put a cap on the interest rates that payday lenders may charge at 36 percent annual interest?”
As Himpler points out, who wouldn’t support that? He goes on to say:
“But the rest of the question should have been “… even if it means that consumers would not be able to borrow funds of less than $2,500.” That’s because a rate cap on all consumer loans would make it much harder for working Americans to borrow the funds they need for everything from car repairs, refrigerators or furniture.”
At NILA we have noticed this tendency for the CRL to pull stunts like this to promote its brand of politics. It is a regular and tiresome occurrence, with the potential to cause a great deal of damage if policymakers buy in to it. Indeed, CRL has played a major role in securing rate caps in certain states to the clear and unequivocal detriment of lower income consumers, who lose access to the lowest cost state regulated loans available and must look elsewhere to meet their credit needs.
We commend AFSA on calling these practices out.
Bill Himpler’s opinion piece can be read here:
Let’s not hinder consumers’ access to credit (The Hill)