CRL Misinterprets Statistical Information Report Inaccurately Suggests Regulatory Programs are Not Effective

A January 18, 2007 white paper developed by Veritec Solutions LLC, a regulatory services company, states that a study by the Center for Responsible Lending misinterprets data and thereby leads to flawed conclusions. Several of the findings and conclusions reflected in the CRL Report are based on reports published by Veritec Solutions LLC. Veritec is concerned that certain conclusions derived in the CRL Report are a misinterpretation of statistical information and that the conclusions inaccurately reflect the effectiveness of state regulatory programs in Florida, Oklahoma and other states.

Veritec's analysis shows that some of CRL’s conclusions directly contradict with these state laws and statistical information published from respective regulatory programs, which is based on millions of actual payday loan transactions.

Veritec found that the following conclusions made in the CRL Report are not an accurate reflection of statistical information.

• False conclusion #1: Ninety percent of payday lending revenues are based on fees stripped from trapped borrowers
• False conclusion #2: The typical payday loan borrower pays back $793 for a $325 loan.
• False conclusion #3: Regulator data corroborates high levels of loan flipping and that regulator data confirms that most borrowers renew payday loans many times per year.

Review full study (PDF)