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This continues an exploration of Richard Eskow's Huffington Post article "Usurious Payday Loans: Myths, Flawed Studies, and Solutions."

Richard Eskow: Do payday loans cash in on 'at risk' groups?

Richard Eskow attacks an Elliehausen study in regards to whether payday loans take advantage of "at risk" people, but he does so by simply saying that Elliehausen has published papers that backs the payday loans industry. He then quotes papers from the other side that says otherwise. Eskow ridicules the sample group of Elliehausen's study for being voluntary rather than random, and Eskow claims that there might be sample bias. Before Eskow could prove that Elliehausen's study was tainted, further exploration as to the motivations of the sample group for participating would be needed. As it stands, this reflects a "he said, she said" situation, which provides hardly any proof of his side's superiority. The burden of proof, yet again, rests upon the shoulders of the accuser. And Richard Eskow is incapable of making any headway. Nothing he claims negates any of these finding by Elliehausen:

• Heads of young families make up 63 percent of customers.
• Borrowers aged 65 and older take up only 10 percent of customers, meaning the elderly are not being exploited or targeted as many critics claim.
• Customers generally have "lower and middle incomes"; 41 percent earn $ 25,000 to $ 50,000 each year, while 39 percent make $ 40,000 or more.
• Taking a larger share than those in the lower bracket ($ 15,000 or less) are higher income payday loan customers (those who make more than $ 50,000). This refutes that fabricated idea that the poor and destitute are being "targeted."
• About 90 percent of customers have a high school diploma if not better, while 54 percent have gone to college and/or have a higher education degree.
• General indications are that payday loan customers' access to credit is limited, yet they still use payday loans sparingly.
• An astounding "81 percent of customers recalled receiving information on the annual percentage rate for their loan" and were conscious of overall costs.
• What's more interesting is that 86 percent of no fax payday loan customers said the product was a "useful service."

Furthermore, here are some other academic studies that show just how payday loans benefit consumers. Satisfy the burden of proof, Mr. Eskow. That's the way it works in America.

Payday loans have appeared because there is demand

The sensationalist argument that more payday loans stores have cropped up faster than fast food restaurants since 1990 is all flash without substance. The growth has almost nothing to do with some diabolical plot and everything to do with filling a need. Banks refuse to lend to consumers who do not meet their credit requirements. Payday loans fill the gap for customers who need short-term credit (such as to pay a utility bill to avoid shutoff, or to repair a commuter car and make it to work) and can get said credit in no other place. It's a means to an end that 94 percent of its customers use in a responsible fashion – 94 percent do not roll over loans, according to long-existent industry materials (such as those of Advance America, Form 10-K, which Meyers suggests that Eskow read).

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