Community Financial Services
Association of America
Best Practices for the
Payday Advance Industry
CFSA Members must abide by the following Best Practices:
1. Full disclosure. A member will comply with the dis- 8. No criminal action. A member will not threaten
closure requirements of the state in which the payday advance or pursue criminal action against a customer as a result of the
office is located and with federal disclosure requirements in- customer's check being returned unpaid or the customer's ac-
cluding the Federal Truth in Lending Act. A contract between count not being paid.
a member and the customer must fully outline the terms of the
payday advance transaction. Members agree to disclose the 9. Enforcement. A member will participate in self-polic-
cost of the service fee both as a dollar amount and as an an- ing of the industry. A member will be expected to report viola-
nual percentage rate ("APR"). A member, in compliance with tions of these Best Practices to CFSA, which will investigate the
CFSA guidelines where they do not conflict with applicable matter and take appropriate action. Each member company
federal, state or local requirements, will further ensure full agrees to maintain and post its own toll-free consumer hotline
disclosure by making rates clearly visible to customers before number in each of its outlets.
they enter into the transaction process.
10. Support balanced legislation. A member
2. Compliance. A member will comply with all applicable will work with state legislators and regulators to support re-
laws. A member will not charge a fee or rate for a payday ad- sponsible legislation of the payday advance industry that incor-
vance that is not authorized by state or federal law. porates these Best Practices.
3. Truthful advertising. A member will not ad- 11. Extended Payment Plan*. Each member will
vertise the payday advance service in any false, misleading, or provide customers who are unable to repay a payday advance
deceptive manner, and will promote only the responsible use of according to their original contract the option of repaying the
the payday advance service. advance over a longer period of time. Such an extended pay-
ment plan will be offered in compliance with any requirement
4. Encourage consumer responsibility. A in state law to provide an extended payment plan or, in the
member will implement procedures to inform consumers of the absence of such a requirement in state law, in compliance with
intended use of the payday advance service. These procedures the Best Practice "Guidelines for Extended Payment Plans."
will include the placement of a "Customer Notice" on all mar- A member will adequately disclose the availability of the Ex-
keting materials, including all television, print, radio and on-line tended Payment Plan to its customers in compliance with any
advertising, direct mail and in-store promotional materials. requirement in state law for such a disclosure or, in the absence
of such a requirement in state law, in compliance with the Best
5. Rollovers. Members shall not allow customers to Practice "Guidelines for Extended Payment Plans."
rollover a payday advance (the extension of an outstanding ad-
vance by payment of only a fee) unless expressly authorized by 12. Internet lending. A member that offers payday
state law, but in such cases where authorized the member will advances through the Internet shall be licensed in each state
limit rollovers to four (4) or the state limit, whichever is less. where its payday advance customers reside and shall comply
with the disclosure, rollover, rate, and other requirements im-
6. Right to rescind. A member will give its customers posed by each such state, unless such state does not require
the right to rescind, at no cost, a payday advance transaction the lender to be licensed or to comply with such provisions, or
on or before the close of the following business day. the state licensing requirements and other applicable laws are
preempted by federal law.
7. Appropriate collection practices. A mem-
ber must collect past due accounts in a professional, fair and 13. Display of the CFSA Membership Seal. A
lawful manner. A member will not use unlawful threats, intimida- member company shall prominently display the CFSA Mem-
tion, or harassment to collect accounts. CFSA believes that the bership Seal in all stores to alert customers to the store's affili-
collection limitations contained in the Fair Debt Collection Prac- ation with the association and adherence to the association's
tices Act (FDCPA) should guide a member's practice in this area. Best Practices.
Supplemental Guidelines for member company implementation of CFSA Best
Practices are incorporated herein by reference and are available upon request.
* Laws in some states do not permit implementation of CFSA's Extended Payment Plan (EPP). CFSA is working with regulators in these states to
obtain approval of CFSA's EPP and with legislators to promote its adoption into state law.
(p) 888.572.9329 (F) 703.684.1219 (e-mail) email@example.com (web) cfsaa.com
cfsa best practices acceptance form :: rev. 08/11
How has the payday lending industry evolved? The payday lending industry has enjoyed meteoric growth in the past couple of decades since its modern incarnation arose from the check cashing business during the early 1990s. From virtually no payday lending stores in the early- to mid-1990s, the industry has boomed to more than 20,000 outlets today.
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