WASHINGTON — The Community Financial Services Association ofAmerica, an association representing payday lenders, has attacked anew report on thrift.

“While the intentions are good, the recommendations in thereport demonstrate the complexity of small-dollar, short-termcredit offerings and their costs,” said, D. Lynn DeVault, CFSApresident. “So-called 'solutions' such as annual rate caps wouldeliminate not only payday lenders, but also the model credit unionalternatives described in the report as well.”

A Commission on Thrift issued a report, Confronting the DebtCulture, which recommended, among other things, a public educationcampaign for thrift modeled on the campaigns to reduce smoking anddrunk driving; increased support for existing thrift institutionslike credit unions; development of new initiatives that providelow-interest consumer loans and savings as alternatives to paydaylenders, and returning to usury rate caps on small loans.

Unsurprisingly, the CFSA attacked the parts of the report thatdealt with payday lending and payday loan rates, pointing out thatthe alternatives to payday loans would also fail a 36% interestrate cap.

“The payday loan alternatives recommended in the report provideanother choice for consumers, but cannot be considered areplacement for payday loans,” DeVault said.

“And when you calculate the total cost of the credit unionalternatives, the 36% annual interest rate cap would eliminate themas well. The authors of this report need to rethink theirrecommendations.”