Defending Predators?

The NYT Cityroom has a great piece up this afternoon on myths and realities of payday lenders. They highlight two different websites, one an outlet for the industry and another that parodies it. I'm not sure which one does a better job of making me laugh, the one that is trying to be humorous or the industry trying to keep a straight face.

From NYT's Cityroom:

There is a new Web site today, which I’ll get to in a moment. But first you should check out the site it is parodying, from the Community Financial Services Association of America – otherwise known as the Payday Lenders.

On the Myth v. Reality page, you will find:

“Myth: Payday loans are extremely expensive and have exorbitant interest rates.

“Reality: Payday loans are two-week loans — not annual loans! Industry critics quote the “390% annual percentage rate” to misrepresent the truth and to help make their case. The typical fee charged by payday lenders is $15 per $100 borrowed, or a simple 15 percent for a two-week duration. The only way to reach the triple digit APRs quoted by critics is to roll the two-week loan over 26 times (a full year). This is unrealistic considering that many states do not even allow one rollover. In states that do permit rollovers, CFSA members limit rollovers to four or the state limit—whichever is less.”

It then goes on to calculate annual percentage rates for banks charging exorbitant bounced check fees or credit card late fees on a $100 loan or charge. They range up to 1,409 percent. So, it concludes, “the high APR of payday loans pales in comparison to the realistic alternatives considered by consumers.”

I guess the above quote is funny in a sad way. They really try hard to sound believable, even when all of this is coming straight from some marketing professional's ass. The parody site, Predatory Lending Association is more clean cut and direct in their 'predatory analysis.' Be sure to check out the PLA's site, there is so much snarky goodness inside.