Letters to the Editor
The New York Times
620 Eighth Avenue
New York, NY 10018

Re: A response to your editorial on payday lending.

My name is Tim Ranney and I am the president of Clarity Services, a leading credit bureau in the non-prime credit services industry. I wanted to offer a few thoughts on your March 4 editorial on payday lending and the information you used from the Pew Research Center study that you referenced.

First off, let me say that I am not an opponent or proponent of payday lending or any other financial services industry segment. We are a credit bureau. Our job is to collect financial and credit transaction data on consumers, store it securely, and distribute it accurately and in accordance with regulations in the form of credit reports.

Your editorial as well as an article you printed a few days ago, relied on research from Pew Research. Pew based their results and conclusions on survey responses from about 450 consumers nationwide. To think that one can draw valid conclusions on a national population using such a limited population stretches logical boundaries. If you wanted to draw behavioral conclusions of a group of 1,000 high school students, do you think you could draw a good conclusion by talking to 4 of them? I leave it to you to answer that question for yourself.

Clarity processes more than half a million report requests per day for consumers seeking many different types of credit. We have data in our systems on about 35 million non-prime consumers. The data tells us a story significantly different than Pew’s results. Pew’s data says that the “typical” payday loan consumer has an income of about $30,000. Our research tells us the number is slightly over $50,000. Pew’s research says that only 49% of the population using payday loans are employed, and our research indicates the number is about 82%. Pew’s results are based on such limited data, yet all of the results they claim are skewed in a direction that perpetuates the view that the consumer is always a victim. The data we see leads us to different conclusions.

I do believe the industry, researchers, government regulators, and others are making a sincere effort to understand the issues faced by credit-challenged consumers and to find ways to promote alternatives that are workable for consumers as well as the financial services industry. The consumer is not served when researchers and New York Times reporters use questionable research and pre-conceived personal opinions in attempt to influence the dialogue.

Tim Ranney
Clarity Services

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