11 Jan The Payday Loan Industry Launches a So-Called National Public Education Campaign
The Community Financial Services Association of America (CFSA), the only national and exclusive advocate for the payday advance industry and its customers, launched a National Public Education Campaign targeting payday lending. CFSA launched a website located at www.knowyourfee.org. It purports to provide information for consumers considering such loans.
It also boasts that the campaign is helping consumers avoid the cycle of debt by requiring CFSA member companies to offer an extended payment plan to customers who are unable to repay their payday advance when due, with no additional cost.
CFSA made another bold move by voluntarily warning customers against the improper use of payday advances. CFSA members are now required to affix a Customer Notice to all advertising and marketing material. The Customer Notice is as follows: “Customer Notice: Payday advances should be used for short-term financial needs only, not as long-term financial solutions. Customers with credit difficulties should seek credit counseling.”
The print ads and the television ads boast that by January 1, 2008, all CFSA member stores will display payday advance fees on easy to read posters that will show the amount of the advance, the fee, and the annual percentage rate.
One informative feature of this new campaign is an interactive web page that shows the United States and allows the user to scroll over each state to see the permissible maximum fee and APR for a $100 payday cash advance. For example, the site claims that in Maine, the maximum fee for a $100 payday cash advance is $33.33 with an APR of 869%.
Interestingly, CFSA issued a press release claiming that households without access to payday loans are forced to use costlier credit products and suffer greater financial difficulties. Can it be that there can be a costlier credit product than a $100 payday loan in Maine with a $33.33 fee and a 869% APR?
In summary, it appears that CFSA is making a very loud and public campaign purporting to inform consumers. However, after reviewing the CFSA website, it makes one wonder whether these so-called improvements will truly inform and benefit consumers.
The Payday Loan Industry Uses Cash to Buy Partnerships with Minority Groups by Attorney Chip Parker, Esquire.
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