Member Best Practices

In addition to full compliance with all state and federal laws and regulations, CFSA requires its members that offer small dollar loans to abide by a strict set of mandatory best business practices.

These CFSA Best Practices, which have been in effect since 2000, 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 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 require our members to:

  • Comply with all state and federal laws;
  • Hold a license in each state where the company does business;
  • Limit the number of loan rollovers for single payment loans;
  • Employ appropriate collection practices;
  • Engage in truthful advertising;
  • Encourage consumer responsibility through the use of customer notices on all marketing and in-store promotional materials; and
  • Offer an Extended Payment Plan at no additional fee to those customers who cannot repay their single-payment small dollar loan on time.

CFSA takes important steps to ensure that its member companies are in compliance with these Best Practices through the following:

  • Requiring all short-term lending member companies to confirm they abide by the Best Practices by submitting a signed copy of an annual “Best Practices Acceptance Form”;
  • Conducting periodic audits through the engagement of an independent outside auditing firm;
  • Promoting ongoing educational efforts and communication to members; and      
  • Responding to customer complaints where violations of the Best Practices are alleged.

CFSA members understand the importance of holding themselves to a higher standard. Compliance with mandatory Best Practices is one way in which CFSA member companies set themselves apart from others in the small-dollar lending industry.

To view all CFSA Best Practices, click here

Error Message