Thursday marked the deadline for payday loan businesses that belong to the Community Financial Services Association of America to comply with new practices.
If you get an advance on your paycheck from such a shop, keep in mind that the lender must:
• Include a customer notice on all advertising and marketing materials advising consumers to use the loans only for short-term financial needs.
• Avoid advertising that promotes payday loans for frivolous purposes such as gambling and vacations.
• Display the association's seal.
Association members have about 150 stores in Kansas, including Advance America, Check 'N Go, Check into Cash and QC Holdings, which does business as Quik Cash. The group says it represents about half of all payday lenders.
"Consumers across the nation will be better informed and protected because of these important changes," Darrin Andersen, president of the association, said in a news release.
Sunflower Community Action, a grassroots group in Wichita, has been critical of the payday lending industry, saying the fees and interest rates charged are so high that people become trapped by the loans.
A bill that would have tightened consumer protections failed to make it out of committee during the last legislative session.
A change proposed by the association that takes effect in July will likely have the most impact on consumers who borrow against their paycheck.
Starting July 31, association members will be required to offer an extended payment plan to customers who cannot repay their loans. At least once a year, customers will be able to extend their balance in four equal payments.
source:http://www.kansas.com/news
