Washington Post Story on the 'Unbanked' Misleads Readers
Posted on: Tuesday, 13 October 2009, 15:31 CDT
Payday Lending Customers Are Banked, Industry Heavily Regulated by the States
WASHINGTON, Oct. 13 /PRNewswire-USNewswire/ -- The Washington Post story, "'Unbanked' but No Longer Ignored," included critical errors that require a correction, said the Community Financial Services Association of America (CFSA), the national trade association of the storefront payday advance industry.
Business reporter Ylan Q. Mui confuses payday lending with other financial services, fails to mention state regulations and ignores the fact that payday lending customers are, in fact, banked.
Glaringly missing from the story is the fact that the payday lending industry is regulated at the state level. State regulations include, among other things, caps on fees and loan amounts, limits on rollovers and extended payment plans for customers who cannot repay the loan when due.
Payday advances are small-denomination, unsecured, short-term loans, usually due on the borrower's next payday. The average loan is $345 and the typical fee is $15 to $17 per $100 borrowed. Payday lending customers are required to show proof of a steady income and a checking account at a bank or credit union. All payday lending customers are banked.
"These inaccuracies are significant because the story purports to be about unregulated financial services whose customers are 'unbanked,'" said D. Lynn DeVault, CFSA President. "Payday lenders do not fit into either category."
About the Community Financial Services Association of America
The Community Financial Services Association of America (CFSA) is the only national organization dedicated solely to promoting responsible regulation of the payday advance industry and consumer protections through CFSA's Best Practices. As such, we are committed to working with policymakers, consumer advocates and CFSA member companies to ensure that the payday advance is a safe and viable credit option for consumers.
For up-to-date news and information on the payday lending industry, visit www.paydaypundit.org.
SOURCE Community Financial Services Association of America (CFSA)
Source: PR Newswire
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