November 13, 2018

AILA Members and Friends:

Please find attached the PEW Charitable Trusts October, 2018 report, State Laws Put Installment Loan Borrowers at Risk; How outdated policies discourage safer lending. I share this report with you so that you will know the type of information that is being circulated to policy makers.

There are some seriously misleading conclusions. For example, PEW criticizes repeat borrowing as a characteristic of installment lending, while wholly failing to acknowledge and address repeat borrowing on credit cards, charge cards and equity credit lines as comparable activities. Rather, the report only compares payday and title loans. Further, PEW criticizes the inclusion of voluntary ancillary products in loan transactions while not analyzing the relatively inexpensive cost of such products against the occurrence of more and more frequent, devastating losses to borrowers—especially subprime borrowers—from hurricanes, wildfires, tornadoes, volcanoes and floods.

Most significantly, the PEW report completely ignores the economic reasons why an installment loan is such an important product, as well as the competitive reasons why installment loans are such an attractive product for 10’s of millions of customers.


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