The Community Financial Services Association of America has launched an lobbying effort against the proposed Consumer Financial Protection Agency.
The association, which represents payday lenders including some credit unions, is worried that the new agency will effectively ban the short-term, small-dollar loans that consumer groups have long protested on account of their interest rates.
"It is obvious from the letters that people who have used payday loans fully understand the terms, greatly appreciate the option and do not want Congress to limit their credit choices," said Lynn DeVault, president of the CFSA. "The payday lending industry is unique in that customers like the product exactly as it is. I don't think banks, credit cards or even credit unions can say the same."
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"So-called consumer advocacy organizations are pushing federal legislation that would ultimately ban payday loans. But let's be clear, these organizations who have nothing to lose do not speak for the 19 million American households who use payday loans. The real-life impact of a ban would be devastating to many families," said DeVault.
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