And just to give our audience more color on the importance of competition in the marketplace, and how it drives innovation and reduces costs for the millions of consumers, here’s another quote from Martin that CFSA supports:

“A strongly regulated short-term credit market is desperately needed by millions of Americans trying to manage tight budgets in a tough economy. The Birmingham News should take time to better understand this important issue before taking a position, and should be encouraging competition, new services and entrepreneurship in this market, not the elimination of a single service.”

Back in July, CFSA’s D. Lynn DeVault sent a letter to the editor to American Banker discussing the same issue. Here’s a look at what our Board Chair had to say:

“The storefront payday lenders represented by the Community Financial Services Association welcome banks and credit unions into the payday lending market. Increased competition will drive innovation and reduce costs for the millions of consumers who need help managing unexpected and periodic financial difficulties. Our members offer a regulated mainstream financial service that competes favorably with deposit advance and overdraft protection products. What is important is that the CFPB ensures all short-term credit options are simple, fully disclosed, transparent and cost competitive.”

Barbara Martin, Divisional Director of Operations for Advance America, had a great response to an article that came out last week in the Birmingham News online.

“Your uninformed conclusion to eliminate this service from the marketplace would only force consumers who rely on payday advances to use other, less-regulated, more-costly, short-term credit products such as illegal offshore Internet loans and overdraft protection, or pay late fees on credit cards and utility bills.

In Georgia and North Carolina, where payday lending was effectively banned, a Federal Reserve Bank of New York staff report found bounced checks, personal bankruptcies and complaints about other types of lenders jumped significantly when consumers no longer had the regulated payday-loan option.”

Congrats to the Online Lenders Alliance for a successful conference this week in Denver (that’s where we were this week, listening to all the latest developments in technology and innovation in the online space). While we’re giving a round of applause to OLA, we also want to hand it to Charles Hunter of Borrow Smart Alabama for his editorial in the Birmingham News.

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.

One of the biggest problems with the payday advance debate is that too many reporters don’t do their homework and wind up getting their facts wrong.  Your Payday Pundit is pleased to see that there are still some newsies out there who take journalistic accuracy seriously and gives kudos to the Birmingham (AL) News for doing the right thing with this correction:

http://www.al.com/birminghamnews/stories/index.ssf?/base/opinion/1203758117258680.xml&coll=2

Your Payday Pundit particularly loves this line from the correction:

“The editorial should not have criticized the payday-loan industry for these practices.”

‘nuf sed.