WASHINGTON--(BUSINESS WIRE)--Today, the Community Financial Services Association of America (CFSA), the organization representing reputable storefront payday lenders, denounced the collection practices of some non-bank lenders in the debt-collection industry, reported in today’s Wall Street Journal.
According to The Journal, in 2010, at the request of debt collectors, judges issued more than 5,000 arrest warrants against defaulted borrowers, a practice allowed in more than a third of U.S. states.
“It is simply wrong to pursue criminal complaints against consumers who have defaulted on personal debt,” said D. Lynn DeVault, board chair of the CFSA. “Lenders should be working with their customers to figure out a solution. Our members offer borrowers an extended payment plan at no extra cost to the borrower and adhere to CFSA Best Practices which prohibit any criminal recourse.”
CFSA’s Best Practices state, “A member will 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.”
The CFSA said it would support efforts to bar these aggressive collection practices.
“The small loan market is there to help consumers through a cash crunch. A consumer should be confident that a small loan transaction—typically around $300—will not result in criminal action against him or her. We stand ready to work with regulators and policymakers to block rogue lenders and debt collectors from pursuing criminal complaints.”
About the Community Financial Services Association of America
The Community Financial Services Association of America (CFSA) is the only national organization dedicated solely to promoting responsible regulation of the payday advance industry and consumer protections through CFSA’s Best Practices. As such, we are committed to working with policymakers, consumer advocates and CFSA member companies to ensure that the payday advance is a safe and viable credit option for consumers.