Payday industry rebuttal

The national payday loan industry has faced tough times in the past few years, with Arkansas and many other states all but pushing the industry outside state borders.

Opponents of the industry say payday loan companies are in effect predatory lenders on the poor, charging high interest rates and fees that often push further into debt those who use their services.

The Community Financial Services Association of America fired back in a July 15 report saying that the industry supported 155,000 jobs and added $10.21 billion to the national economy in 2007.

According to the CFSA report, the industry added $85.9 million to the Arkansas economy in 2007, employed 1,477 during that year for a $53.52 million payroll. Also, the industry generated $22.4 million in taxes for state coffers.

The top five states in terms of economic impact, according to the study, were:
California: $1.15 billion
Texas: $812.1 million
Florida: $690.69 million
Tennessee: $676.72 million
Missouri: $596.02 million

Other findings of the study include:
• The industry helped generate more than $2.6 billion in federal, state and local taxes: $775 million were in taxes on production, and the remaining tax income came from corporate and personal income taxes.

• The stores themselves, through direct employment, contributed $2.9 billion in labor income in 2007, which translated to approximately $37,689 per store employee.

• Significantly, suppliers to the industry contributed $1.4 billion in labor income as an indirect result of the revenue generated by the industry. Wages paid to payday advance employees had a $2.1 billion ripple effect in local economies.

The CFSA also has posted a “myths vs. reality” page to challenge what it calls the “propaganda” of payday industry opponents.