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Community Financial Services Association of America Voices Support for Closing Loopholes in 2005 Payday Loan Bill

PR Newswire, April 30, 2008

Seeks compromise legislation to protect consumers, competition

SPRINGFIELD, Ill., April 30 /PRNewswire/ -- The Community Financial Services Association of America (CFSA) today voiced its support for closing loopholes in the Payday Loan Reform Act of 2005, which would achieve durable, sustainable reform.

The organization was responding to a report by the Woodstock Institute that documented practices by AmeriCash, under which the lender was alleged to have moved away from certain types of loans covered under the 2005 law in favor of other types of loans not covered by the measure. CFSA was a driving force, along with consumer groups, behind passage of those reforms.

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Stressing that AmeriCash is not one of its members, CFSA, which represents approximately 60 percent of Illinois' payday lenders, stated that many lenders did move to longer-term loans which are not covered under the 2005 law. Most CFSA members were forced by market pressures to align their product offerings with those of competitors.

"As we did in 2005, we continue to support durable, sustainable reform that will give the public much-needed access to short-term borrowing while guarding against lender abuse," said Mike Waters, spokesman for CFSA. "Everyone's goal should be to close loopholes and make the 2005 law work as intended. But we need the same playbook for everyone to ensure competition is not undermined."

CFSA has called for two minor changes to SB1993, one that reflects the intent of the 2005 Reform Act and the other to ensure consumer protections while keeping the payday loan product profitable.

CFSA is encouraged by the fact the different groups and lawmakers working on this issue appear to have resolved most of the large issues standing in the way of reform. CFSA urged members of the Illinois General Assembly to ensure smaller issues do not impede broader reform.

"Reform is indeed needed, but it should not force the industry to discontinue popular and needed borrowing vehicles by inserting financially unsustainable provisions," Waters said. "In these difficult economic times, it is critical that the public's access to liquidity not be jeopardized."

CFSA is the national trade association that represents payday lenders across the nation. CFSA represents approximately 60 percent of Illinois' payday lenders.

Contact: Mike Waters

847-778-4351

CONTACT: Mike Waters, +1-847-778-4351, for Community Financial Services Association of America

Community Financial Services Association of America Voices Support for Closing Loopholes in 2005 Payday Loan Bill

PR Newswire, April 30, 2008

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