Small-dollar, short-term loans sometimes get a bad reputation due to the dishonest and unprincipled behavior of a few bad seeds. If it weren’t for the CFSA, consumers might be afraid to trust an online lender. So what is the purpose of the CFSA? The Community of Financial Services Association of America (CFSA) was established to alleviate consumers’ concerns and improve the safety and security of the lending process.
What Is the Purpose of the CFSA?
The Community Financial Services Association of America (CFSA) is a national organization “dedicated to advancing financial empowerment for consumers through small-dollar, short-term loans” (source). So what is the purpose of the CFSA? A decade and a half ago, the CFSA was formed to protect consumers through the promotion of beneficial laws and regulations. In addition, they preserve consumers’ access to credit options and encourage responsible practices in the payday advance industry.
CFSA is committed to bettering the lives of consumers by promoting fair lending practices and insisting that loans have terms and conditions that are easy to understand. Because of the organization’s influence, legislators and regulators have passed strong consumer protection laws, and many lenders have improved their policies.
So as you shop for a payday loan, look for a seal that states the lender is a CFSA member. All CFSA members must be committed to conducting payday advance transactions safely and responsibly, and to that end, members must abide by the CFSA’s Best Practices. For example, these are some of the many policies of the CFSA:
- Fees must be displayed in large type on posters in all store locations.
- Customers must be given the option of an Extended Payment Plan at no extra charge if they cannot repay their loan when it is due.
- Members must not charge a fee or rate for a payday advance that is not authorized by state or federal law.
- Members will not advertise payday advance services in a false, misleading, or deceptive manner.
- Members must implement procedures to inform consumers of the intended use of the payday advance service, including a placement of a “Customer Notice” on all marketing materials.
- Customers must not be allowed to rollover a payday advance unless expressly authorized by state law. If authorized, rollovers must be limited to four or the state limit, whichever is less.
- Customers must have the right to rescind a payday advance transaction at no cost on or before the close of the following business day.
- Members must collect past due accounts in a professional, fair, and lawful manner. They must not use unlawful threats, intimidation, or harassment to collect accounts.
- Members must not threaten or pursue criminal action against a customer as a result of the customer’s check being returned unpaid or the customer’s account not being paid.
- Members offering online payday advances must be licensed in each state where their payday advance customers reside and shall abide by all rules and regulations of each state (unless the state does not require lenders to be licensed or follow provisions, or if federal laws preempt the state’s licensing requirements and laws).
So what is the purpose of the CFSA? To protect consumers seeking small-dollar, short-term loans.
As a consumer, it is in your best interest to seek a payday loan through a CFSA member. Because members are required to follow the organization’s Best Practices, you can feel confident in the reliability and integrity of the transaction.
If you would like to apply for an installment loan, check out Advance Paycheck Online, a proud member of the CFSA. We are direct lenders offering short-term advances and online installment loans to the residents of four states: Illinois and Wisconsin. Our flexible payment schedules will help you pay off your loan as soon as possible, and we prorate the fees involved so that if you pay off the loan early, you will have very few fees to pay. To get started, please contact us online or give us a call at 1-815-436-4242. We would be happy to help!