CFSA (The Community Financial Services Association): What is it?
The CFSA is basically a lobbying group who has a mission of getting regulations and standards set for the payday loan industry. Although they give the impression that they are working for the best interests of the borrower they are in fact a group that represents the lenders. Their main goal is to improve the image of the payday loan industry. In many ways this has helped the borrowers by forcing legislation to get rid of the most exploitative practices. Nevertheless the group still comes under some pretty heavy criticism for the way that they operate.
The Community Financial Services Association was created because of the bad reputation that the payday loan industry had. The lenders realized that unless things changed nobody would use payday loans so they created a self regulating group in order to clean up the industry. In large part this was done to instill consumer confidence but it was also done because it was becoming pretty obvious that the states would soon start regulating payday loans if the industry didn’t do so itself. The result was the CFSA who now work with the state regulators to create rules for the industry.
The main way that the CFSA operates is by working with the legislators to create the rules for payday loans. This is what has brought about a lot of the criticism of the group. There is a feeling that the rules they propose don’t really protect the consumer. Certainly things like requiring that the total cost of the loan be clearly displayed on all posters have been helpful. On the other hand little has been done to actually bring the costs of a payday loan down to a reasonable level or to reduce the risk of people getting stuck in a cycle of having to take loan after loan.
The main reason that the CFSA has come in for so much criticism is that they are very aggressive in the way that they lobby the politicians. While most people would agree that payday loans do have a place in the modern world it is also fair to say that they way that the payday loan industry operates needs to change. Clearly the goal of the CFSA is to prevent this from happening. They want to make sure that they can continue to earn the large profits that they have been making.
The payday loan industry has an image problem and the CFSA are clearly trying to address this. They have been partially successful in doing this but they have also caused a lot of controversy as well. The one thing that is clear is that despite their claims that they are looking out for the best interests of borrowers this is clearly not the case. They are looking out for the best interests of the payday loan industry.