Keeping Customers Informed So They Can Make Responsible Decisions
CFSA member companies abide by industry Best Practices that enable you to rescind the transaction at no cost before the end of the following business day by returning the full amount of the advance to the provider.
CFSA member companies protect the confidentiality of customers’ personal information and have strict privacy policies. Payday loan transactions are not reported to credit bureaus.
One of the main advantages of payday lending for consumers is that they can borrow amounts that are smaller than banks are generally willing to lend. A payday lender can provide a loan for as little as $100. In addition to falling at or below the state maximum, the amount of a payday advance is determined by the customer’s net income. Because payday advances are income-based, sometimes customers are unable to borrow as much as they would like. Although it limits the amount of money a customer can borrow, this policy serves as an important consumer protection. Payday advance providers wouldn’t help customers if they were to lend them more money than they are able to repay.
Our members’ fees are competitive and in compliance with applicable state and federal law. CFSA members provide clarity to customers by displaying the cost of a payday advance on signs in the stores and in disclosure agreements. The terms of a loan are clearly outlined in the lending agreement and are in accordance with the Truth in Lending Act (TILA).
No, your payday advance provider does not obtain a credit report from any of the three major credit bureaus. Unlike many other financial institutions, most payday advance companies do not require that you have a good credit rating or credit history—as we believe in providing customers with access to credit.
Most CFSA member companies do, however, subscribe to a risk assessment service that indicates whether a potential customer is currently in payments to similar businesses. It may also indicate whether an applicant has cash advances outstanding with other companies that subscribe to the same service.
Payday advances are not reported to traditional credit bureaus.
Should a customer of a CFSA member company have difficulty paying back a loan when due he or she may enter into an Extended Payment Plan, a provision of the CFSA’s Best Practices that allows the loan to be repaid over a period of additional weeks. This option is provided to customers for any reason and at no additional cost to the borrower.
If a consumer does not choose to take advantage of the extended payment plan, each company has its own collection procedures, but every CFSA member company is committed to collecting past due accounts in a professional, fair, and lawful manner as required by our Best Practices. If necessary, your payday advance company may turn an overdue account over to a collection agency.
However, if your check is deposited and your bank returns it due to insufficient funds, you may be charged a returned check fee by your payday advance provider, if permitted by applicable law. You should also be aware that most financial institutions charge a non-sufficient funds fee for a returned check and, in some circumstances, may revoke your checking account privileges.
A payday advance should be used responsibly and for only the purpose for which it is intended: To solve temporary cash-flow problems by bridging the gap between paydays. It is important for a customer to recognize his or her ability to repay the loan when due. A payday advance is not a long-term solution for ongoing budget concerns or difficulties in managing finances.
No. In accordance with CFSA’s industry Best Practices, member companies do not threaten or pursue criminal prosecution against customers if a check is returned unpaid. If it becomes necessary and is appropriate, however, companies may seek civil remedies to collect past due accounts.
Some state laws allow rollovers, although most do not. Even in states that permit rollovers, CFSA member companies limit rollovers to four or the state limit, whichever is less. Limiting rollovers is a consumer protection designed to ensure responsible, short-term use of the service. Under CFSA’s Best Practices, customers who cannot pay back their loans when they are due have the option of entering into an Extended Payment Plan, allowing them to repay their loans over a period of additional weeks. This option is provided to customers for any reason and at no additional cost to the borrower. It is important that you fully evaluate the cost versus the benefit of rolling over a payday advance. Check with your payday advance company to determine your options.
The agreement you read and sign prior to receiving a payday advance is a contract that complies with all applicable state and federal disclosure requirements. It fully outlines the terms of the payday advance transaction including the cost of the service fee both as a dollar amount and as an annual percentage rate (APR). Full disclosure provides all the information needed to make an informed financial decision and ensures that the lender you are borrowing from is in compliance with the Truth in Lending Act (TILA).
If you have a problem that you cannot resolve by working with your payday advance lender, call the CFSA Customer Hotline at 888.572.9329, fill out this complaint form, or e-mail us at LoanQuestionsCFSA@MultiState.com. Remember, CFSA can only respond to grievances filed against a CFSA member. You can identify our member companies by the CFSA seal affixed to the store window.
that the typical fee for a $100 payday advance is cheaper than fees charged for bouncing $100 check?
Managing household finances can be a daunting task. However, by using solid budgeting and savings techniques, you can accomplish major financial goals. In the Customer Resource Center, CFSA offers a variety of payday advance resources that support and encourage responsible lending practices, and highlight the vital role of our members’ stores in neighborhoods near you.
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Here you will find an aggregate of industry research, comprehensive data, and benchmarking tools from the short-term lending industry. They cover all payday advance business areas – consumer demographics, media hits, the latest policy initiatives, among others. Click here to access to the partner's resource library.
CFSA works at the federal, state, and local levels educate legislators and regulators about the role of payday advances in the broader financial services arena. This section provides resources for policymakers who believe in access to credit, want to preserve financial options and ensure balanced, substantive consumer protections. Click here to enter the Policymaker Resource Library.