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Critics have been successfully perpetuating the myth that the payday advance industry exploits the elderly, the uneducated, and the downtrodden. One State senator, in proposing restrictive payday loan legislation, referred to borrowers as "these unfortunate people." Newspaper articles graphically describe the plight of the most irresponsible borrower and intentionally or not project that story onto the entire group of payday loan consumers.

By advancing this myth, critics have created a warped idea of the industry's customer base - the typical payday loan borrower - and in some cases have used this misinformation to influence the sensitivities of some state regulators who have blocked access to credit to the segment of the population most in need. Would it be in the public interest to block access to food to an entire population because some people dangerously overeat?

In truth, the typical payday advance customer represents the lion's share of America's middle class. A typical payday loan customer is a hard working, family raising adult who does not have savings or disposable income to use as a safety net when an unexpected expense occurs.

Here are the facts*:

• The majority of payday advance customers earn between $25,000 and $50,000 annually;
• Sixty-eight percent are under 45 years old; only 4 percent are over 65, compared to 20 percent of the population;
• Ninety-four percent have a high school diploma or better, with 56 percent having some college or a degree;
• Forty-two percent own their own homes;
• The majority are married and 64 percent have children in the household; and,
• One hundred percent have steady incomes and active checking accounts, both of which are required to receive a payday advance.

*Source: The Credit Research Center, McDonough School of Business, Georgetown University, Gregory Elliehausen and Edward C. Lawrence. Payday Advance Credit in America: An Analysis of Customer Demand. April 2001."

From time to time so called public-interest groups display studies that support the myth that a bad credit loan is harmful to the borrower. Examine the source of data for these studies. Chances are the researcher combined payday lenders with other financial services such as pawnbrokers, car title lenders, and check cashing outlets. These other entities are in a different line of business and have a different customer base. All payday advance customers have steady jobs and active bank accounts, factors which may or may not be present in the other business lines.

The public interest demands that payday lenders clearly disclose all the fees and terms that might be associated with payday cash advance, that they provide qualified customer service personnel to answer questions, and that payday lenders who advertise falsely or misrepresent their service be subject to prosecution. The public interest is not served by mischaracterizing payday borrowers as other than intelligent, responsible adults.

(C) 2008. Peter Boston. The decision to get a short term payday advance loan should be made by an adult consumer, not a politician.