The payday advance service emerged in the early ‘90s, and grew as a result of strong consumer demand and changing conditions in the financial services marketplace. A number of changes in the marketplace prompted industry growth, including:
The exiting of traditional financial institutions from the small-denomination, short-term credit market—a change largely due to its high cost structure;
The soaring cost of bounced checks and overdraft protection fees, late bill payment penalties, and other informal extensions of short-term credit; and
The continuing trend toward regulation of the payday advance service, providing customers with important consumer protections.
Today, payday loan stores fill the need for small dollar, short-term credit in communities throughout the country. Industry analysts estimate that 20,600 payday advance locations across the
United States extend about $38.5 billion in short-term credit to millions of working Americans in 19 million households who experience cash-flow shortfalls. In addition to being a valuable source of credit for many consumers, the payday loan industry makes significant contributions to the U.S. and state economies employing more than 50,000 Americans who earn $2 billion in wages and generating more than $2.6 billion in federal, state, and local taxes.
In response to the industry’s growth, CFSA was founded to help ensure consumer confidence in, and long-term success of, the payday advance industry. CFSA member companies represent more than half of the payday advance industry. The association’s Board of Directors is comprised of industry leaders from large and small, publicly traded and privately held companies.
Category: Payday loans