FiSCA Statement regarding the U.S. Senate Special Committee on Aging Hearing
The Financial Service Centers of America (FiSCA) issued the following statement regarding the U.S. Senate Special Committee on Aging hearing entitled "Payday Loans: Short-term Solution or Long-term Problem?”
“Financial Service Centers of America (FiSCA) welcomes the interest of the U.S. Senate Special Committee on Aging in the issue of payday lending to seniors. FiSCA is committed to working with legislators, regulators, consumer advocates, and other financial industry stakeholders to satisfy all of their questions regarding our products and services. FiSCA members offer payday loans in accordance with the laws of the states that permit them, and in compliance with FiSCA's stringent Codes of Conduct, which govern the credit offerings and other products offered by FiSCA members. Payday loans are also subject to the federal Truth in Lending Act, which calls for the disclosure of the cost of credit in terms of Annual Percentage Rate (APR), and other federal laws. As such, the payday loans offered by FiSCA members are a safe, viable, and regulated credit option for consumers who choose to use them to meet their credit needs. FiSCA's Code of Conduct for Offering Access to Credit has, since its adoption in 2007, required that its members offer consumers extended payment plans both independently, and as required by state laws. FiSCA's Codes of Conduct provide an array of robust consumer protections, including full disclosure of costs and fees, appropriate and reasonable collection processes, and limitations on rollovers.
"With respect to the concern of the Senate Special Committee on Aging regarding payday lending to seniors, independent analysis provided by Veritec Solutions, LLC, has established that only 7.2% of all payday loan transactions in Florida were conducted by borrowers age 65 and older. Florida's data is consistent with that of Washington state, where only 6.1% of customers were age 65 and older, and that age group conducted only 7.3% of all payday loan transactions. In North Dakota, the number of transactions for borrowers over age 60 for 2012 was only 6.6%.
"It is also worth noting that state legislatures across the country have passed laws permitting payday loans and other consumer credit products in their states. Within the constraints of these laws, FiSCA members have been innovators in developing financial products and services that closely meet consumers' needs. These innovations include installment loans, which are already being offered by FiSCA members where permitted by law. In the area of promoting savings, FiSCA members pioneered the FiSCA-NetSpend National Savings Program, which allows consumers to utilize a prepaid card to save money in an FDIC insured savings account that pays a higher than market rate of interest. This program has resulted in millions of dollars of savings by the customers of FiSCA members.”
Click here to view the plenary statement FiSCA filed with the United State Senate Special Committee on Aging.