CFSA Announces Major Changes in Payday Advance Service

Newly Mandated Industry Guidelines Address Community Concerns

CFSA has instituted self-imposed changes to how its member companies deliver the payday advance service. Backed by a $10 million consumer education campaign, these unprecedented changes include providing consumers with critical information about the responsible use of payday advances, and offer customers the option of additional time to repay their loans —with no financial penalty. In addition, the changes include measures to ensure that the payday advances are marketed responsibly.

The most significant changes are the association’s enhancements to CFSA’s Best Practices. These changes aim to address concerns voiced by community leaders, elected officials and consumer advocates. In doing so, CFSA has taken a major step towards helping consumers avoid the cycle-of-debt. The association adopted a new Best Practice requiring member companies to offer an Extended Payment Plan to customers who are unable to repay their payday advance when due, giving them additional time to close out their loan with no additional fee or interest of any kind.

In addition, CFSA made another bold move by voluntarily warning customers against the improper use of payday advances. In accordance with this new Best Practice, CFSA members are now required to affix a Customer Notice to all advertising and marketing material.

Below are details of CFSA’s public education campaign, the Best Practices, and other initiatives aimed at ensuring consumers’ right to short-term credit offered in a responsible manner.