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Richard Eskow, a private-sector consultant who works for corporations and organizations that include the World Bank, is rather miffed about what Lawrence Meyers had to say regarding Eskow's anti-payday loans argument. Though Meyers comes across somewhat less than professional in the manner in which he addresses Eskow, calling him a "simple child," the exchange certainly brings up some very real questions about Mr. Eskow's claims that's spelled out in his recent Huffington Post article "Usurious Payday Loans: Myths, Flawed Studies, and Solutions." Much of Eskow's criticism of the payday loans industry appear to be centered on how the industry supposedly targets the poor and minorities. As we will soon see, however, one who lives in a glass house should not throw stones.

Richard Eskow and his ties with the World Bank

Keep in mind that Richard Eskow is closely allied with the World Bank. And their aim, according to the World Bank's Articles of Agreement, is to "assist in the reconstruction and development of territories of members by facilitating the investment of capital for productive purposes." Yet, as the Bretton Woods Project, the World Bank forces stipulations on countries that borrow based on what is called "Washington Consensus," rather than just the specific needs of the borrowing country.

World Bank faces much criticism for the loans originated by them. For example, Bretton Woods points out an example in which hydroelectric dams were funded and constructed despite the high probability it would displace indigenous people who inhabit the area. Teaming up with the private sector, as the World Bank does, has also raised concerns of demoralizing the role of individual states to provide essential goods and services, which Bretton Woods claims has caused a deficiency of such services in "countries badly in need of them."

Richard Eskow – is this what he supports?

It's quite strange that Eskow would support something like this, because towards the end of his rant on the Huffington Post, he seems to think it is actually a good idea to permit states to make their own decisions regarding payday loans. But just moments before, he proposes that Congress structure its own agency to regulate the payday loans industry out of business. It appears Eskow is arguing his own conflicting options about payday loans and other financial matter, if not out-and-out hypocrisy. However, let us consider the meat of his argument regarding payday loans, which is of focal interest.

Eskow claims payday loans 'exploit helpless people'

For years, this is an argument that the pro-bank establishment has used. Those with a religious sensibility go as far as to tie payday loans with usury, which is far from accurate. Unwarranted and illegitimate charging of interest is what usury amount to. Payday loans do not reflect on either of those counts, and hence do not make sense to Eskow's idea of usury. Eskow cites anti-payday loans studies funded by such anti-payday loans industry groups as the Center for Responsible Lending as support for his arguments. He also pokes at pro-payday loans studies by saying that they're often funded (at least in part) by pro-payday loans groups.

At worst, these two things could cancel out each other. Eskow could still be left on the grounds of the legal logic where the burden of proof rests solely upon the accuser. But the Center for Responsible Lending was founded by Herb and Marion Sandler (mavens of the subprime mortgage crisis) and is backed by Martin Eakes of Self-Help Credit Union/Self-Help Inc. A great deal of doubt exists as to whether any of those sources are reputable when it comes to financial responsibility. Thus, Eskow's anti-payday loans material could easily be viewed as the weaker of the two sides.

Tags: burden of proof, huffington post, Payday Loans, richard eskow