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Payday lending industry adopts fee disclosure policy
The Community Financial Services Association of America, the organization that represents 60 percent of the payday lending stores across the nation, announced last week that it is requiring all members to display posters in every store that clearly states all fees associated with a payday loan.
The new self-imposed guidelines also require that fees be prominently displayed on all CFSA member web sites. The fees will be stated in dollar amounts and as APR’s, or Annual Percentage Rates.
Darrin Andersen, President of CFSA said in a press release, “Consumers have a right to know all of the fees associated with a financial product so they can make informed financial decisions. CFSA’s new policy ensures that customers know, in simple terms, exactly what the fees are before they enter into any transaction.”
The new policy follows a series of “Best Practices” guidelines that have been implemented by the CFSA over the past year.
The practice of payday lending, also known as a cash advance, is a transaction between a lender and a consumer who uses a post-dated check or their electronic checking account information as collateral against a short-term loan.
Payday loans have been the center of much controversy in recent years.
The Center for Responsible Lending, a non-profit, non-partisan coalition of attorneys, policy analysts, and researchers based in Washington, D.C., California, and North Carolina, has commissioned studies on predatory lending practices focusing on the impact of state laws and regulations that protect consumers.
The center estimates that predatory lending practices cost American families 4.2 billion dollars annually in fees.
Advance payday loans are illegal in 14 states, and many lending chains use out of state banks in order to avoid local state laws.
Source : http://www.bransondailynews.com |
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