Payday Advance and the Military

The facts do not support the claim that payday advance companies target the military

• Research confirms that military personnel represent a small percentage of payday advance customers nationally
• A 2005 poll conducted by one of the nation’s leading pollsters, Penn, Schoen & Berland Associates, found that only 3. 69% of active-duty military personnel have used a payday advance in the last five years, only 1. 18% had an advance outstanding;
• The nationally representative sample interviewed 1,002 members of the U. S. Armed Forces, across all branches of service;
• With an active duty military population of 1. 4 million, this incidence rate translates into 51,660 military personnel who have used a payday advance in the last five years and 16,520 with an advance outstanding;
• New poll results discredit widely publicized and unsubstantiated claims that military personnel are heavy users of the payday advance service; and
• Poll also confirms previous findings of payday advance customer surveys and individual company records that reported a small percentageof the industry’s customer base as military; 

The payday advance customer demographic is extremely broad—not dominated by any population segment

• The service offers a small, unsecured cash advance to those needing help between paydays;
• Research consistently confirms that customers are middle-income, educated young families, many of whom have not accumulated assets or a credit history—a large and diverse audience;
• The misperception that military are heavy consumers of payday advance is rooted in confusion among product offerings in the fringe financial services market;
• Many people confuse payday advance stores with check cashing stores;
• When check cashers locate near military bases, it’s primarily because they cash government checks, sell money orders, wire money and exchange currency—services often used by military personnel;
• Mono-line payday advance stores (those businesses offering only payday advance);
• Are typically located in suburban shopping centers anchored by national/regional retailers—not usually near the base gates—and serve the credit needs of entire surrounding communities;
• Even though the military represent a small percentage of CFSA member companies’ customers, the association has responded to their needs with special programs and practices;
• In March ‘03 CFSA adopted a resolution urging members to consider actions addressing the special needs of military customers during war;
• Companies responded in 5,000+ locations, with programs going beyond those required by the Soldiers’ and Sailors’ Civil Relief Act, to provide additional accommodations for our troops;
• National program recognition was awarded to First American Cash Advance, which received a bronze eagle during the American Legion’s 85th National Convention, and to Check Into Cash, which received a National Corporate Award from the Veterans of Foreign Wars; and
• CFSA also established a toll-free hotline to help military customers get questions resolved quickly;

In 2004 CFSA enhanced its mandatory Best Practices member standards to include special provisions for active duty military payday advance customers

• Under advisement of its Advisory Council on Military Affairs, a panel of retired military officers and senior noncommissioned officers, CFSA adopted Military Best Practices, establishing protections and information resources specific to the military; and
• Provisions include: prohibition on the garnishment of military wages or salaries and on contacting the military chain of command to collect payment; deferral of collection activity against a military customer deployed to combat or national guardsman or reservist called to active duty; and efforts to strengthen the financial knowledge of military members.