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Online Lenders Alliance: New Center for Responsible Lending Report is a Deeply Flawed, Intentionally Misleading, and Methodologically Unsound Salvo in their Ongoing War to Harm Consumers by Eliminating Their Credit Access

By September 27, 2022April 26th, 2024No Comments

ARLINGTON, Va. (September 27, 2022)—In response to a new “research report” released by the Center for Responsible Lending (CRL), Online Lenders Alliance Executive Director Andrew Duke issued the following statement:

“This so-called research report uses a flawed approach to reach flawed findings regarding the small dollar loan market. There are also patently false claims made throughout the report. As with most of their other activities in this space, they start with the conclusion that arbitrary rate caps will improve consumers’ lives and bend over backwards to make their data support their position.”

Among the many issues with the report and its methodology:

  • It claims that consumers do not understand “annual percentage rates” (APRs) by providing examples of consumers misstating the APRs in their loan agreements, yet the report primarily focuses on a survey that asks consumers if they had ever taken out a loan with an APR of 37% or higher.
  • It claims that “loan products have, by design, opaque pricing terms and conditions.” However, the loan agreements it includes in its appendix clearly state the APR and the loan amount in dollars and cents, as all online installment lenders must do in order to comply with the Truth in Lending Act (TILA).
  • It claims that lenders don’t underwrite loans, which is simply false. Unsurprisingly, CRL provides no evidence supporting their claim.
  • It claims that 60% of the loans that were taken out had been refinanced or rolled over to extend the loans terms, yet it does not distinguish between different installment loan products (e.g. payday/installment, traditional installment, online, secured, unsecured, etc.). CRL also fails to include the number of survey respondents who weren’t sure of the status of their loan, which is likely to artificially inflate the share of refinanced loans.

“If CRL were to get their way, the consumers who rely on short-term credit products to manage their finances and make ends meet would be worse off, period,” Duke continued. “If they are going to wage a war on credit-strapped consumers, they should at least be transparent about their goals and use honest tactics instead of misleading propaganda.”

An abundance of data refutes many of the other claims CRL makes in its report. First, the Online Lenders Alliance published the results of a consumer survey in Illinois following the imposition of a 36% rate cap by the state on March 23, 2021. The survey shows that 93% of consumers who had taken out loans with APRs greater than 36% believed that the loan helped them manage the financial situation they were facing at the time. In addition, 79% of consumers would like the option to go back to their previous lender if they had a funding need with only 9% of consumers saying they would not like the option to go back. In other words, the vast majority of consumers benefited from the option to take out loans that best suited their unique needs. More information on this report can be found here.

Second, an academic study on installment loan products found that only about 20% of loans were part of a sequence of loans, which would indicate rollover or refinancing. This directly refutes CRL’s claims that 60% of installment loans are refinanced. More information from this study can be found here.

Third, the Morning Consult published a fintech report in 2021 that asked respondents how their credit scores were impacted after taking out a consumer loan through a fintech company. A large plurality of respondents said that their credit score had improved after taking out the loan, regardless of income, ethnicity, and other demographic characteristics. More information from this study can be found here.

About The Online Lenders Alliance

The Online Lenders Alliance (OLA) is the first trade association in FinTech. OLA is focused on credit inclusion, bringing together a diverse group of innovative companies who share a common goal: to serve hardworking Americans who deserve access to trustworthy credit. Our members are entrepreneurs, publicly-traded companies, lenders, credit bureaus, advertisers, lead generators, compliance professionals, and software developers who are leveraging technology to responsibly improve consumers’ financial health. Consumer protection is our top priority and OLA members abide by a rigorous set of Best Practices and Code of Conduct to ensure consumers are fully informed and fairly treated. For more information, please visit

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