July 10, 2018 | Access to Credit
The Community Financial Services Association of America (CFSA) today released a modernized set of best business practices to further enhance consumer protections and address the evolving credit needs of small-dollar loan customers. CFSA member companies are licensed and regulated in each state in which they operate, and these mandatory Best Practices ensure they continue to hold themselves to a higher standard of responsible lending and help consumers make informed financial decisions. Additionally, these modernized best practices are intended to cover all small-dollar loans provided by CFSA member companies, including automobile title and installment loans.
“We are excited to release our modernized Best Practices, which help ensure CFSA member companies continue to provide their customers with superior service, offer customers the best resources available to make informed financial decisions, and deliver unparalleled transparency,” said CFSA CEO Dennis Shaul. “Small-dollar loans are a vital form of credit for millions of American households, and these Best Practices will further protect consumers as they look to small-dollar loans to fulfill their financial needs.”
CFSA’s new set of mandatory Best Practices include 15 lending requirements for member companies – up from the CFSA’s previous 13 Best Practices. The two new provisions of the modernized Best Practices are:
In addition to the two new requirements, several existing Best Practices have been updated with substantive changes, technical adjustments, or both. Among the changes to the existing Best Practices:
CUSTOMER NOTICE: There are a wide variety of loan products available in the marketplace, so your choice of lending products should match your financial needs. Small-dollar loans used over a long period of time can be expensive.
“As evidenced by the high customer satisfaction scores enjoyed by CFSA member companies, we enjoy great relationships with the customers we serve and have worked over the past year to strengthen the organization’s Best Practices. We believe that our customers will be pleased with result of this effort. These Best Practices allow us to stay true to our mission of balancing strong consumer protections while providing access to short-term credit for millions of Americans,” added Patrick O’Shaughnessy, Chairman of CFSA’s Executive Board. “We will continue to hold ourselves to the highest standard as we provide hard-working Americans with the financial resources they need to provide for their families and themselves.”
CFSA’s Best Practices have been in effect since 2000 and have been periodically updated over the years. While the new set of Best Practices are effective now, member companies will have until the end of the calendar year to be in full compliance. The transition period until January 1, 2019, provides members time to modify software and computers systems, update employee handbooks and operational procedures, and train employees.
Customers can find more information about CFSA’s Best Practices by visiting CFSA’s website, as well as inquiring at local storefronts of CFSA member companies.