In response to an article that ran last weekend, Mr. Hunter said this:

“The News used the loaded word “predatory” to describe the short-term lending industry and said lenders “force people who are least able to pay into a cycle of debt.”

For years, the industry has been trying to determine why anyone, particularly well-educated and worldly journalists, would have this unfounded impression the short-term lending industry is exploitative in any way. Perhaps this perception remains from the years before the passing of the 2003 state law that regulates the payday loan industry and protects consumers from cyclical debt.

Before that time, there were some “loan sharks” out there who did, in fact, live up to the reputation the industry can’t seem to shake. This misperception might also stem from media reports over the years stirred up by industry opponents using PR tactics to further their political agenda.

But here’s the punch line: It’s just not true. In this case, perception is not reality. The reality is that hardworking Alabamians occasionally need to borrow a couple hundred dollars to serve an urgent need. They are more than willing to pay the one-time fee of 17.5 percent the law allows to borrow that money.

I challenge the members of the City Council and The News to walk into any payday loan store in Birmingham and talk to a few customers. Take out a loan, perhaps. Don’t just believe what you read or what you hear. Find out from real people who use our products. I think you’ll be surprised by the truth.”

And we just wanted to applaud you.

As far as alternatives go and the need for more clarity and transparency in disclosure agreements, the following was a key quote from a representative from Pew Charitable Trusts:

Susan Weinstock, Pew Charitable Trusts: “Unfortunately, the checking accounts in our study did not meet this standard. We found a median of 111 pages of disclosure documents…The banks often used different names for the same fee or service; put the information in different documents, different media, or different locations in a document…Many of these documents are not user-friendly, with much of the text densely printed, difficult to decipher, and highly technical and legalistic.”

We believe that CFSA’s Best Practices should be considered as a blueprint for responsible lending within the payday advance industry, and can be adopted for most short-term financial products. Provisions include: Full disclosure of fees, truthful advertising, right to rescind, appropriate collection practices, including no criminal action, and a requirement to be licensed in each state where the company does business.

“Different banks charge different fees. Different fees are applied under different terms and conditions. Different banks give different names to the very same fee,” Date said. “Ideally, consumers would have a simple way to evaluate checking account costs.”

“You don’t have some inherent right just to get a certain amount of profit if your customers are being mistreated,” he said in an interview with ABC News. “My hope is that you’re going to see a bunch of the banks saying to themselves, ‘You know what, this is not good business practices.’”

Will the CFPB be cracking down on BofA’s $5 fee? That still remains to be seen.

According to The Hill: “… no officials from the relatively new bureau have indicated the agency would be cracking down on the fee.”

In her post, Hillebrand said: “Payday lending operations—including those that operate online and those that target people residing on reservations—continue to be a concern for both communities.”

We wanted to remind our readers that CFSA Best Practices require that all our member companies that offer payday advances through the Internet must be licensed in the state in which the customer resides and that they comply with all applicable state laws. As a condition of membership, members must abide by all CFSA Best Practices and pledge their commitment to them annually.

In a statement on Native American partnerships with payday advance companies, our Board Chair D. Lynn DeVault said this: “CFSA believes that our strict set of Best Practices is a business model that ensures strong consumer protections while preserving access to short-term credit.”

“The fact remains that for the many years that I sat on this committee and considered bills concerning payday lending, the bottom line is we ask DFI every year for the number of complaints they received. There were none, none. Repeatedly year after year we could find no evidence of complaints [through] DFI. Now that has certainly changed in the last year, because now DFI reports that the Washington law that limits eight payday loans per year, now they’re turning to unlicensed Internet payday lenders and here are the complaints. Hundreds of them. Not one before the law, now all of these after the law. … Now I would rather have my constituents doing business with a licensed regulated entity that DFI can control. But we have no way of regulating out of state or out of country [lenders].”

Today, payday advance stores fill an important need for small dollar, short-term credit for banked, working Americans in communities throughout the country. Millions of customers across the country have used payday advances responsibly and appreciate having somewhere to turn when they need quick access to credit. Analysts estimate payday advances are used by 19 million American households.

We strongly encourage consumers who need access to credit to do business with CFSA members who are required to be licensed and regulated. A member that offers payday advances through the Internet must be licensed in the state where the payday advance customer resides.

As an example, in October, 2010, the Washington State Department of Financial Institutions (DFI) warned consumers of the danger of unlicensed payday lenders.

“When a consumer takes a loan from an unlicensed lender, there is very little we can do to protect them, and often little we can do to the company if they don’t adhere to our laws, especially if they are located outside of the United States.”

As a reminder on CFSA Best Practices:

• CFSA members always provide the most transparent application forms and fee descriptions. We strongly support applying these to all other short-term lenders, both bank and nonbank.

• Members are required to disclose the cost of the service fee in both dollar amount and as an APR on loan documents and informational brochures. In addition, members must post fees in large type on posters in all store locations to ensure that customers know, in simple terms, exactly what the fees are before, not after, they enter into a transaction.

In light of these simultaneous debit card rewards decreases and fee increases, the question that’s being asked: Should consumers be looking for checking account alternatives? This article encourages consumers to consider prepaid card accounts. Why? Because they are not subject to interchange fee caps and can basically serve the same purpose as a checking account.

“The surprise is, no matter how much government tries to regulate and legislate away this small loan market, it keeps coming back,” says Moebs. “People want and need a funding safety net.”

AND CONTINUED FROM THE STORY:

“Regulators should get out of and stay out of the short term money needs of consumers — they cause more problems than solutions. Instead of trying to tell consumers what they need and how to manage their money, let the market do it,” says Moebs, whose clients include banking and savings institutions.

“The huge mistake that many make when looking at overdrafts, payday loans and pawn loans, is trying to measure it by large loan standards — namely APR. It’s like bringing a baseball speed gun used to measure the velocity of a pitch to measure the speed of a college or NFL football player. Overdrafts are measured by fee amounts, not rates.”