A word to the wise to all consumers of payday loans: Use a CFSA Member! We want to make sure that situations like this don’t happen. Remember, using a CFSA Member means you’re doing business with a legitimate financial institution.
A member will comply with the disclosure requirements of the state in which the payday advance office is located and with federal disclosure requirements including the Federal Truth in Lending Act. A contract between a member and the customer must fully outline the terms of the payday advance transaction. Members agree to disclose the cost of the service fee both as a dollar amount and as an annual percentage rate (“APR”). A member, in compliance with CFSA guidelines where they do not conflict with applicable federal, state or local requirements, will further ensure full disclosure by making rates clearly visible to customers before they enter into the transaction process.
A member will comply with all applicable laws. A member will not charge a fee or rate for a payday advance that is not authorized by state or federal law.
You’ll know when you’re taking out a loan with a CFSA member if you see this seal.
Quoting an article that ran in The Daily Texan today that used targeting in its lede in for the report: “… astutely recognized lenders’ predatory nature on working-class and financially inexperienced Austinites.”
Just a point of clarification, as this statement is misleading. CFSA members do not target certain demographics. Our members are located in population centers, and in convenient locations where customers live, work, and shop. As brick and mortar lenders, CFSA members are part of the neighborhoods they serve and are sensitive to the needs and concerns of our customers.
Let’s not forget that our service provides access to credit to more than 19 million banked customers across the United States who choose our product to meet their small-dollar, short term needs. Research shows that payday advance customers generally come from moderate income, working families, with most customers earning between $25,000 and $50,000 annually. Payday advance customers are educated; 90 percent have a high school diploma or better, with 54 percent having some college education or a degree. For more information on demographics, click here.
We’ve heard plenty from Texas lawmakers and journalists about the payday legislation that passed in the House and Senate, but today we heard from actual industry members about the new rules.
“We’re happy this passed. A lot of legislators told me they wanted to get some regulations on the books,” said Dan Feehan, CEO of Fort Worth-based Cash America International, the nation’s biggest operator of pawnshops and a payday lender.
Probably to the surprise of some critics, industry members seem to be just fine with the new bills.
In an editorial from today’s Houston Chronicle, University of Houston Professor of Law Jim Hawkins provides some interesting perspective on the recent payday lending bills in the Texas legislature. In particular, Hawkins takes note of CFSA’s Best Practices as a model for effective lending guidelines:
These bills actually contain substantially less protection for consumers than the “best practices” created by the payday loan industry itself. That’s right — if payday lenders just follow what their own trade group – the Community Financial Services Association of America (CFSA) – instructs, consumers will be better off than they will under these bills.
Last week, we told you about the two payday lending bills that passed in the Texas state legislature. But it is the third of these bills, which did not pass, that has former Speaker of the Texas House of Representatives disappointed with last week’s events. According to this piece in the Lubbock Avalanche-Journal, Craddick blamed lobbyists for preventing the third bill from getting as far as its two companion bills.
The payday lending lobby, Craddick said, killed legislation, including his House Bill 410, which would have closed a 14-year loophole responsible for the high interest rates payday lenders charge to delinquent borrowers.
…”That is a huge expenditure for a relatively small number of payday lenders,” [Andrew] Wheat said. “We’re not talking about Chase Manhattan (Bank) here.”
Members of the Dallas City Council unanimously agreed on zoning regulations for payday and auto title lenders earlier this week. Spearheaded by Council member Jerry Allen, the new rule will determine where payday lenders can open up their businesses in Dallas. Coming on the heels of last week’s payday legislation on the state level, payday lending has been a hot topic among Texas lawmakers recently.
The ordinance aims to limit the proliferation of payday and car-title lenders by requiring the businesses to obtain special-use permits and by restricting where they can locate.
More than 200 of these operations have already set up shop in Dallas, many of them in struggling southern Dallas neighborhoods. The existing stores won’t be forced to play by the new rules, but the council’s action will curb further expansion.
We told you yesterday that the Texas House of Representatives passed the Senate version of HB 2592. Well, now its companion bill, HB 2594, has followed suit and gotten through the house. The second of the two bills requires payday lenders to be licensed and provide data to the state. The two bills will now go to Governor Rick Perry for his signature before they become laws.
A day after passing through the Texas Senate, the House has followed suit and approved of the Senate version of House Bill 2592. If passed, the bill that now just awaits the signature of Governor Rick Perry will require more extensive disclosure from payday lenders in Texas. House Bill 2594, which requires payday lenders to be licensed by the state, still awaits final House approval.
Payday lending could soon become more transparent for borrowers looking for money fast — the House today concurred with the Senate version of a bill that would require payday lenders to disclose interest rates and fees associated with the loans.
After passing through the Texas House of Representatives last week, two payday lending regulation bills (House Bills 2592 and 2594) made their way through the Texas Senate on Monday. The bills will now go back to the House, where they will need to get approval of any Senate changes before they get to Governor Rick Perry.
Sen. John Carona, R-Dallas, said his legislation is a modest step to require more than 3,500 storefront payday offices to obtain a state license and to disclose information about their fees to customers.
The legislation does not address the so-called cycle of debt — when consumers extend their short-term loans, on average a dozen times, racking up heavier fees.
While the fight in the Texas House of Representatives may be over, the San AntonioNews Express continues to focus on last weeks debate over the three payday lending bills that were on the House floor. In particular, the paper’s editorial board takes issue with Rep. Gary Elkins’ (R-Houston) involvement in the legislative process, seeing that he owns a payday lending company in Texas.
Elkins has brought disrepute on himself. He also placed House members in the troubling position of supporting legislation a colleague had appealed to them to oppose on the basis of personal interest, or opposing that legislation for his apparent financial benefit.
