Payday Lenders Association Also Backs Rules To Protect Seniors Accounts
The Community Financial Association of America has released a statement supporting the regulation of firms which would tap into social security recipients accounts to repay payday type loans.
The CFSA is a nationwide association of payday lenders.
The National Consumer Law Center and other critics have attacked a practice among banks of offering payday loan type of products that are linked to social security recipients bank accounts. Payday lenders, generally, use checks written by the borrowers to access fund in their deposit accounts.
Lynn DeVault, board chair of CFSA, said she knows of no payday advance companies that engage in this practice and that the industry strongly supports efforts to block all lenders from gaining access to a borrower's bank account through these sub-account arrangements.
"Citizens receiving government benefits are among the most vulnerable members of society," DeVault said. "We agree with the consumer groups that the Treasury Department should stop banks from giving lenders access to bank accounts through these sub-account arrangements."