El Paso Times: Payday loans: Study finds industry depends on rollovers
February 2, 2014
William J. White says that payday lenders don’t depend on making loans to people who can’t immediately pay them off, but a prestigious national foundation disputes his assertion.
White, who is vice president of payday lender Cash America and chairman of the industry-regulating Texas Finance Commission, in December claimed that his industry does not depend on charges it collects from borrowers who can’t pay them off after the initial term for its profits. He implied that borrowers who couldn’t immediately repay would not pay at all.
“Anybody who loans money or sells a product where they don’t get paid for it, all they’re doing is losing money,” White said. “Why would you do that?”
White came under fire for other comments he made in an interview in which he said his company did not exploit people who were desperate for cash. Instead, he said, people who were trapped in payday loans were guilty of making bad financial decisions, such as buying $6,000 televisions.
State Sen. Wendy Davis, the Democratic candidate for governor, seized on the comments and said they show that White is unfit for the chairmanship of the finance commission, which oversees the state’s consumer watchdog.
White also is wrong when he claims that his industry does not depend on customers who, instead or immediately paying off loans, rack up interest by repeatedly rolling them over, according to research by the Pew Charitable Trusts, a nonpartisan, nonprofit foundation that studies public policy issues.
Read more here.