In response to the Iowa CCI’s press release, the Fairness To Payday Lenders Society issued their own release. Mysteriously, this release was pulled by the news agency that originally released. We suspect that the Iowa CCI realized they had no rebuttal, so they moved to censor free speech.

Shame shame, CCI. What are you afraid of? Honest debate? Wouldn’t surprise me.

FOR IMMEDIATE RELEASE:
Jackson Strain, bizmaven9@gmail.com
Office: 310-393-4111

Payday Lenders to CCI Members: “Enough Most Certainly is Enough!”

Tuesday, June 16, 2009 – Des Moines, Iowa – The Fairness To Payday Lenders Society (FTPLS) informed the Members of Iowa Citizens for Community Improvement (CCI) today that they are in agreement that “fair lending in the community does not include crushing interest rates, unrealistic payback periods and misleading advertising, and everyday people deserve access to good, affordable credit, ” and that payday loans do not fit this criteria.

CCI was educated on the economic basics of short-term unsecured loan rates, in which FTPLS demonstrated that, because of average monthly store overhead of $8,000 and default rates of 6%, it is impossible for payday lenders to offer short-term unsecured loans for less than what Iowa law currently permits. In addition, CCI was educated that consumers pay a fee for payday loans, rather than interest. Only because the Truth in Lending Act requires that an APR be identified with the product is any interest rate even mentioned. CCI was further educated that every non-partisan study ever conducted has proven that customers base their borrowing decision the flat fee charged for the loan, not the APR.

FTPLS was also proud to enlighten CCI that payback periods are realistic by the consumer’s own standards, and that any lender who is a member of the Community Financial Services Association (CFSA) permits customers to utilize an extended payment plan.

FTPLS also informed CCI that it appreciates CCI’s presentation of their own loan product, and is pleased that competition has entered the market, which only benefits consumers. The Society feels certain that the free market will determine what product suits customers best, and that paternalistic government policies should not eliminate choices that CCI does not agree with.

FTPLS went one step further than CCI, calling on state regulatory agencies to sanction any lender engaging in misleading advertising.

In response to CCI Member Misti Craig’s statement that, “It looks like these lenders don’t see us, the community, as a priority”, FTPLS reminded Ms. Craig that she does not speak for, nor represent, the community, and she certainly has no authority to speak on behalf of the tens of thousands of satisfied payday loan customers. FTPLS reminds Ms. Craig that nobody is forced to take out a payday loan, or any other form of credit. Given the 154 million payday loan transactions that occurred nationwide in 2008, consumers recognize the value of the product and do not need Ms. Craig’s help to make their credit decisions.

In addition, FTPLS reminds CCI that the claim that “borrowers are frequently caught in a cycle of debt” is a myth — readily debunked by SEC filings from payday loan companies which show that 94% of all loans are repaid on time.

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