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Monday, March 15, 2010

Debtors' Treadmill: Treasure Map

by Brandi Grissom and Matt Stiles
December 2, 2009  |  2

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Companies that offer short-term, high-interest loans go where the business is: primarily low- and middle-income neighborhoods.

So-called credit service organizations, a group of lenders largely composed of payday and auto-title loan companies, are clustered in Texas neighborhoods that are home to families with incomes of less than $50,000 a year. We compared the addresses of lenders statewide, obtained from the Secretary of State, to U.S. Census data on median household income.

“They’re preying on folks that live paycheck to paycheck but also taking advantage of people that don’t have savings,” said Don Baylor, senior policy analyst ...

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Comments (2)

  • Ryan458 wrote on 12/2/2009 7:51 a.m.

    What are these maps supposed to prove? Most of the businesses are clustered in high-traffic, commercial areas. Where do you want payday lenders to locate?

    Does McDonald's prey on the obese? Let's create a map of fast food locations, compared to income and average weight of area residents and see if we can come up with some "facts."

    Exactly how does a business prey on people? It takes free will to walk into a payday loan center, complete the paper work and accept the money, just as it takes free will to order a Big Mac or to complete any transaction.

  • pzriddle wrote on 12/2/2009 11:08 a.m.

    I love maps, but sometimes a map shows only that a question is too complex to be answered by a map.

    If there's no smoking gun in your maps, one likely explanation is that low-income customers use credit service organizations somewhere between work and home rather than necessarily using them near their homes.

    Furthermore, I don't think that critics of CSOs would assert that their alleged harm is geographical in nature. Unlike, say, polluters or criminal enterprises, a hypothetical predatory lender would not necessarily be harmful to its neighbors, only to its customers.

    I'm very glad to see the Texas Tribune breaking new ground in data journalism. To me it's one of the most exciting things about your endeavor. Sometimes, though, you crank the GIS engine and what comes out is just a pretty map.