Consumer Groups Get an 'F' for Phony Scorecard

The Consumer Federation of America (CFA) and the National Consumer Law Center (NCLC), two out-of-touch "consumer" groups which feel they have the authority to grade state lending laws, were given an "F" today by the Community Financial Services Association of America (CFSA) for deceiving media with a phony scorecard of state laws.

"These so-called ‘consumer’ groups have neither the knowledge nor authority to judge states’ regulation of lending practices," said Tommy Moore, CFSA Executive Vice President. "Grading states based on an arbitrary interest rate cap may be a simple way to generate media attention, but it’s a terrible way to protect consumers and regulate lending practices."

CFA and NCLC released a "scorecard" last week giving states an "F" (fail) if they did not have a stringent annual rate cap and "P" (passing) if they did. However, states have a myriad of laws protecting consumers and to ignore these other consumer protections is deceptive and dishonest, according to Moore.

"The payday lending industry has worked with legislatures in nearly three dozen states to ensure that our service is used properly and serves consumers well," said Moore. "The fact that state regulators receive so few complaints about payday lending is proof that the system works. CFA and NCLC should be ashamed for their deceptive grandstanding."

The Community Financial Services Association of America (CFSA), www.cfsa.net, is the national trade association of the payday advance industry. Representing more than half of the payday advance outlets nationally, CFSA promotes laws and regulations that protect consumers and preserve their access to credit options. The association also works on behalf of members to support and encourage responsible industry practices. Membership is contingent upon compliance with CFSA’s mandatory "Best Practices."

For up-to-date information on the payday lending industry, visit www.paydaypundit.org.