These inaccuracies
are significant because the story purports to be about
unregulated financial services whose customers are unbanked.
D. Lynn DeVault, President, CFSA
Business reporter Ylan Q. Mui confuses payday lending with
other financial services, fails to mention state regulations and
ignores the fact that payday lending customers are, in fact,
banked.
Payday lending industry is regulated at the state level.
State regulations include, among other things, caps on fees and
loan amounts, limits on rollovers and extended payment plans for
customers who cannot repay the loan when due.
Payday advances are small-denomination, unsecured, short-term
loans, usually due on the borrower's next payday. The average
loan is $345 and the typical fee is $15 to $17 per $100
borrowed. Payday lending customers are required to show proof of
a steady income and a checking account at a bank or credit
union. All payday lending customers are banked.
"These inaccuracies are significant because the story
purports to be about unregulated financial services whose
customers are 'unbanked,'" said D. Lynn DeVault, CFSA President.
"Payday lenders do not fit into either category."
