by Leslie Kyman Cooper, Arizona Consumers Council:

A Jan. 14 guest opinion cited failings in our education system as a primary cause of today’s troubles in household finances, mortgage markets and more.

The overly simplistic story by James Bowers of the Center for Economic and Education Literacy holds that increased consumer education and information would cure our nation’s complex financial ills.

But one of the beneficiaries of his center’s advocacy – payday lenders – have a cure that’s worsening the disease.

Bowers’ column failed to disclose that the payday loan industry benefits from CEEL’s Web site.

CEEL and its Web site are projects of Washington, D.C., public affairs specialist Rick Berman.

Payday loan companies are trying to legitimize payday, car title and other extremely high interest rate loans by providing misleading information.

That payday lenders would engage in questionable practices to lure more borrowers should come as no surprise to Arizonans, who just witnessed and conclusively rejected Proposition 200.

As we all recall, payday lenders sponsored that pricey ballot initiative in an attempt to enshrine 400 percent interest rates on payday loans in Arizona law in perpetuity.

That campaign was full of distortions, too.

So it’s not surprising that CEEL fails to mention that respected institutions of higher learning have linked payday lending with significant financial problems.

A 2008 Harvard Business School study found that an increase in payday lending locations is associated with an 11 percent increase in involuntary bank account closures, even after accounting for per capita income, poverty rate, and educational attainment, among other things.

Another 2008 study jointly conducted by Vanderbilt Law School and the Wharton School of Business found payday borrowers to be twice as likely to file for bankruptcy than individuals whose applications for payday loans are rejected.

Like CEEL, the Arizona Consumers Council agrees that “(a)ll too often, financial common sense gets drowned out by slick marketing and political rhetoric.”

But as the $14 million ad campaign to trick voters into passing Proposition 200 demonstrated, it’s the payday lenders that are the chief purveyors of “slick marketing and political rhetoric.”

Bowers’ column, and CEEL’s Web site, are nothing but more of the same.

Almost all of us can agree that more and better math education and stronger financial literacy skills would help most Americans.

And most would probably agree that all kinds of lenders should be required to make clear, conspicuous, transparent and easy-to-understand disclosures about their loan products so consumers can make informed decisions when taking on credit.

Even though they serve a vital purpose, financial literacy and better disclosures cannot replace strong consumer protection and usury caps on the abusive products.

CEEL would do well to heed the math on payday loans in Arizona. A resounding 60 percent of Arizona voters, from every district, rejected Proposition 200, the payday lenders’ expensive effort to keep Arizona borrowers trapped in high cost payday loans forever.

Leslie Kyman Cooper is executive director of the Arizona Consumers Council. E-mail: lesliecooper@azconsumer.org

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In today’s East Valley Tribune, another indication that the people have spoken, and the Legislature better listen: