BY JEFF BLOEM AND KATIE THOMPSON
Each year nearly twelve million Americans take out a payday loan. Operating out of storefronts typically located in low-income communities, payday lenders are known for extending short-term, small-dollar loans with high-interest rates to borrowers who often do not have the ability to repay the loan.
Advocates committed to ending predatory lending faced a setback in February when the Consumer Financial Protection Bureau (CFPB) announced its plans to reconsider the Bureau’s own 2017 small-dollar lending rule and likely remove protections it afforded to borrowers, including a provision that would require lenders to assess whether the borrower has the ability to repay the loan at the outset.
“If a lender will not assess a borrower’s ability to repay before extending a loan, that product is not a loan, it’s a trap. The Bureau’s own research shows that 75 percent of all fees earned by payday lenders come from folks stuck in 11 or more loans a year,” Stephen Reeves, associate coordinator of partnerships and advocacy for the Cooperative Baptist Fellowship, said in a recent statement. “By removing the ability to repay provisions, the CFPB sides with those eager to profit off of 400-percent APR loans given to our most financially vulnerable neighbors.”
In the midst of this news out of the CFPB, The Washington Post published an article entitled, “How a Payday Lending Industry Insider Tilted Academic Research in its Favor.” The article details the exchanges between an attorney with ties to the payday lending industry who approached a research professor with this question: “Would she like to test one of the chief criticisms of the industry, that its customers are harmed by repeatedly taking out loans?” The timing of this request coincided with the CFPB’s preparation for its small-dollar lending rule which was finalized in 2017 – the same rule that the Bureau announced it would reconsider in February. As The Washington Post reported, the attorney was intimately involved in the research and writing of the report, “suggesting research to cite, the type of data to use and even lecturing her on proofreading.”
For many, the “tilted” research and related conclusions are illustrative of the lengths to which the payday lending industry is willing to go to influence rulemaking. According to the article, “[The study] ultimately concluded that taking out repeated loans didn’t harm borrowers, and, according to the emails, Miller discussed the results with a CFPB economist. It’s unclear how it factored into Bureau decisions, but it has been repeatedly touted by payday lending supporters.”
The author of the study denies any outside influence on the report and we may never know about the "tilt" of this particular study. Taking a step back, however, this case leads to a worthwhile discussion about the communication and consumption of rigorous research, and why it may matter now more than ever. How can we protect ourselves from potentially “tilted” research in the future?
Most representations of the scientific method include a final step: “share your results.” This integral step is often forgotten. Each previous step—“ask a question,” “do background research,” “construct a hypothesis,” “perform an experiment,” and “analyze the data”—are all major components in any modern day research methods course in the social or material sciences. This leads to a lack of instruction about how to share or communicate research and hinders scientific progress outside of the silos of academia, research labs, and think tanks. Instead, researchers only attain these skills informally—if at all.
This reality is particularly troublesome because good research does not sell itself. This is an inconvenient truth for many researchers—particularly academic researchers who may have actively chosen not to pursue a career path in sales and marketing.
The idea of selling or marketing research does not imply that researchers are to be dishonest about their findings. In fact, good communication of research implies the opposite: brutally honest, transparent, and digestible research packaged for an audience of non-specialists. There are at least three areas of understanding that can help researchers effectively share their research with others.
First, understand what the audience cares about. This necessary first step is challenging because it requires empathy. Researchers need to understand the perspective of the audience. Why are they reading your research or attending your seminar in the first place? What do they care about?
This is complicated because the audience may not have an objective perspective. They may want to have their prior beliefs confirmed by your research findings. They may only care if your results support their agenda. We will discuss these issues in the next section on research consumption.
Second, understand the research methods. With the computing power and “big data” many researchers have access to today, it is perhaps easier than ever to report on “research” that looks legitimate—even when it is not. The use of buzzwords like “machine learning,” “predictive analytics,” or “ceteris paribus” seemingly increase the credibility of any analytical finding. It is here where researchers have an ethical responsibility. Researchers need to communicate why their particular analytical method is appropriate for the given application. More importantly, researchers need to clearly communicate the assumptions required to make such an application tractable.
Finally, understand the limitations of a single study. It is imperative when researchers sell their research that they clearly discuss these limitations. Perhaps a particular analytical assumption for analysis is unlikely to be valid all, or even most, of the time. Perhaps the results are contrary to the bulk of existing literature. Whatever the case may be, these limitations need to be stated clearly. Researchers need to understand that explaining limitations explicitly does not make their research weaker; it strengthens the scientific rigor of their findings.
Researchers are not the only people who consume research. Non-researchers, from business executives to political staffers, local government managers to non-profit leaders, all consume research in one way or another. Of course, researchers themselves cannot control how their research will be received. Even the best research on a given topic can simply be ignored. All non-researchers also have responsibilities that align with areas of understanding for researchers.
First, take an objective perspective. Non-researchers need to be careful about letting their prior beliefs taint the way they consume research. Searching for research that confirms a given perspective, and ignoring research to the contrary, is not “evidence-based.” More often than not, research with results that conflict with prior beliefs is the most interesting. Taking an objective perspective with the ultimate goal of learning is a fundamental part of the scientific method.
Second, push for a better explanation of research methods. A not-so-well-kept secret is that researchers love to talk about their research. Non-researchers can and should take advantage of this tendency. Email or set up a phone call with a researcher whose work relates to yours. Ask hard questions about anything that is not clearly stated in a research paper, report, or policy brief. If the researcher either cannot or will not explain their work in more detail, then that should factor into an evaluation of the quality of their work.
Finally, don’t make too much of one single study. In most scientific disciplines, the results of the study are very specific—there is often an emphasis on getting an answer to a particular question right for a given point in time in a specific context. Often times. the largest weakness of any research study is the validity of the findings at a different time or in a different context. It is not always clear whether particular results are robust across time and space. Therefore it is necessary for consumers of research not to make too much of one particular study when forming an opinion or making an evidence-based policy decision.
When neither the researcher nor the consumer does their due diligence and neglect to hold our research to high standards, it can have disastrous effects when it comes to policy making. “Tilted” research leads to biased policymaking. While the extent to which the payday lending research discussed earlier informed the CFPB’s decision to reexamine the rule is unknown, this case does present an opportunity for Christians to consider and advocate for responsible communication and consumption of research. Christians are called to seek truth and justice, and in our role as citizens, we are called to “bear responsibility to one another as creatures called to heed God’s standards of justice, love, and good stewardship.” Part of this work must include guarding the truth in an effort to promote policies that honor and uphold public justice and promote flourishing for all members of society.
Jeff Bloem is a Ph.D. student in Applied Economics at the University of Minnesota. Follow him on Twitter @JeffBloem
Katie Thompson is the Program Director and Editor of Shared Justice, an initiative of the Center for Public Justice.