WASHINGTON — The Community Financial Services Association of America, an association representing payday lenders, has attacked a new report on thrift.

“While the intentions are good, the recommendations in the report demonstrate the complexity of small-dollar, short-term credit offerings and their costs,” said, D. Lynn DeVault, CFSA president. “So-called 'solutions' such as annual rate caps would eliminate not only payday lenders, but also the model credit union alternatives described in the report as well.”

A Commission on Thrift issued a report, Confronting the Debt Culture, which recommended, among other things, a public education campaign for thrift modeled on the campaigns to reduce smoking and drunk driving; increased support for existing thrift institutions like credit unions; development of new initiatives that provide low-interest consumer loans and savings as alternatives to payday lenders, and returning to usury rate caps on small loans.

Unsurprisingly, the CFSA attacked the parts of the report that dealt with payday lending and payday loan rates, pointing out that the alternatives to payday loans would also fail a 36% interest rate cap.

“The payday loan alternatives recommended in the report provide another choice for consumers, but cannot be considered a replacement for payday loans,” DeVault said.

“And when you calculate the total cost of the credit union alternatives, the 36% annual interest rate cap would eliminate them as well. The authors of this report need to rethink their recommendations.”

Instant Insights /

Payday Lenders Attack Thrift Report

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