Statement of Financial Service
Centers of America (FiSCA) regarding the U.S. Senate Special Committee
on Aging hearing entitled "Payday Loans: Short-term Solution or
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
"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
Click here to
view the plenary statement FiSCA filed with the United State
Senate Special Committee on Aging.