Member Best Practices

In addition to full compliance with all state and federal laws and regulations, CFSA requires its members to abide by a strict set of mandatory best business practices. These best practices are intended to cover all small-dollar loans provided by CFSA member companies, including payday advance, automobile title, and installment loans. Compliance with mandatory Best Practices is just one way in which CFSA member companies set themselves apart from others in the small-dollar lending industry.

CFSA member companies have always met or exceeded existing state regulations for transparent disclosure of fees and terms. For example, CFSA Best Practices require full, clear, and prominent disclosure of loan fee and term information on poster-sized displays inside all storefronts, including the cost in both dollar amount and as an annual percentage rate. In addition, CFSA Best Practices require members to provide customers the right to rescind a short-term loan at no cost on or before the close of the following business day.

Other significant consumer protections provided by the Best Practices include requiring our members to:

  • Comply with all state and federal laws;
  • Hold all appropriate business licenses in each jurisdiction where the company offers small-dollar loans;
  • Undertake a reasonable, good-faith effort to determine a customer’s creditworthiness and ability to repay the loan;
  • Maintain the privacy of a customer’s personally identifiable information;
  • Employ appropriate collection practices;
  • Engage in truthful advertising;
  • Encourage consumer responsibility through the use of a customer notice on all marketing and advertising materials; and
  • Offer a reasonable repayment plan to customers who are undergoing financial hardship and are unable to repay a loan in a timely manner, including a no-cost extended payment plan to those customers who cannot repay a single-payment small-dollar loan; and
  • Respond to consumer complaints in a timely and appropriate manner.

These CFSA Best Practices demonstrate responsible lending in the small-dollar credit industry with strong consumer protections. Through these Best Practices, CFSA works to ensure our member companies hold themselves to a higher standard of responsible lending and to help consumers make informed financial decisions.

CFSA Best Practices have been in effect since 2000 and were enhanced in 2018 to better serve and protect CFSA member companies’ customers.

To view all CFSA Best Practices, click here.

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