Community Financial Services Association of America
Encyclopedia
The Community Financial Services Association of America(CFSA) is the national organization dedicated to advancing financial empowerment for consumers through small dollar, short-term loans. Now in its 12th year, CFSA was established to promote laws and regulations that protect consumers, while preserving their access to credit options, and to support and encourage responsible payday advance industry practices.
bluntly calls predatory lending
.
The CFSA states that it is open to working with state regulators and disputes the negative impact of its lending practices.
report arguing that the prominence of payday lending among U.S. servicemen and women was compromising U.S. military readiness and troop morale, and that payday lenders were specifically targeting U.S. military personnel. The CFSA disputed the Department of Defense findings, arguing it was based only on the research of payday lending opponents. As a response to these and other charges, the CFSA initiated a US$10 million education and advertising campaign it claimed would help inform borrowers and improve the lending practices of its members. The CFSA hired Eric Dezenhall
, a public relations
specialist, to improve its image. In 2007, the DoD created new regulations that fixed interest 3 classes of short term loans, including payday loans, to military members at a maximum of 36% APR. TLW
Controversy
The payday lending industry has been the source of ongoing controversy due to its lobbying tactics and industry practices that New York Times chief financial correspondent Floyd NorrisFloyd Norris
Floyd Norris born September 6, 1947 Los Angeles) is chief financial correspondent of The New York Times and The International Herald Tribune.He writes a regular column on the stock market for the Times, plus a blog.-Biography:...
bluntly calls predatory lending
Predatory lending
Predatory lending describes unfair, deceptive, or fraudulent practices of some lenders during the loan origination process. While there are no legal definitions in the United States for predatory lending, an audit report on predatory lending from the office of inspector general of the FDIC broadly...
.
”Financial quicksand”
A central criticism of the CFSA member companies has been that payday loans are "designed to keep borrowers in debt". While payday loans are marketed as “one time” or “emergency loans,” the Center for Responsible Lending has found that “borrowers who receive five or more loans a year account for 90 percent of the lenders’ business,” and “lenders…collect 90 percent of their revenue from borrowers who cannot pay off their loans when due, rather than from one-time users dealing with short-term financial emergencies.” The U.S. PIRG has documented how payday loans create a “debt cycle” through high cost rollovers, additional fees, and debt collection. Payday lending practices have fueled calls for increased governmental regulation, and several states have taken legislative action to cap interest rates or outlaw payday lending altogether.The CFSA states that it is open to working with state regulators and disputes the negative impact of its lending practices.
Payday loans and soldiers
Payday loan companies came under attack following a Department of DefenseUnited States Department of Defense
The United States Department of Defense is the U.S...
report arguing that the prominence of payday lending among U.S. servicemen and women was compromising U.S. military readiness and troop morale, and that payday lenders were specifically targeting U.S. military personnel. The CFSA disputed the Department of Defense findings, arguing it was based only on the research of payday lending opponents. As a response to these and other charges, the CFSA initiated a US$10 million education and advertising campaign it claimed would help inform borrowers and improve the lending practices of its members. The CFSA hired Eric Dezenhall
Eric Dezenhall
Eric B. Dezenhall is an American crisis management consultant, author, and founder of Washington D.C.-based public relations firm Dezenhall Resources...
, a public relations
Public relations
Public relations is the actions of a corporation, store, government, individual, etc., in promoting goodwill between itself and the public, the community, employees, customers, etc....
specialist, to improve its image. In 2007, the DoD created new regulations that fixed interest 3 classes of short term loans, including payday loans, to military members at a maximum of 36% APR. TLW
See also
- Alternative financial services in the United States
- Predatory lendingPredatory lendingPredatory lending describes unfair, deceptive, or fraudulent practices of some lenders during the loan origination process. While there are no legal definitions in the United States for predatory lending, an audit report on predatory lending from the office of inspector general of the FDIC broadly...
- MoneytreeMoneytreeMoneytree, Inc. is a check cashing and payday loan provider headquartered in Seattle, Washington, with branches in California, Colorado, Idaho, and Nevada...