Same day loan industry stands against rogue debt collectors

Friday, March 18th, 2011 By

The Community Financial Services Association of America logo.

The Community Financial Services Association of America stands united against unscrupulous debt collection practices. (Photo Credit: CC BY-ND/LULAC National Convention)

The Community Financial Services Association of America (CFSA), a national organization dedicated to the promotion of responsible regulation of the personal loans industry, has issued a press release that denounces aggressive debt collection practices that violate consumer rights, reports the Wall Street Journal. According to the newspaper, more than 5,000 arrest warrants were issued against defaulted borrowers last year in more than a third of U.S. states. The CFSA is lobbying to eliminate this legal practice as used by rogue debt collectors, which the organization considers an affront to consumers in dire financial straits.

The industry stands up for same day loan customers

CFSA board chair D. Lynn DeVault envisions a U.S. same day loans industry that will stand together to put unscrupulous debt collectors out of business.

“It is simply wrong to pursue criminal complaints against consumers who have defaulted on personal debt,” said DeVault. “Lenders should be working with their customers to figure out a solution. Our members offer borrowers an extended payment plan at no extra cost to the borrower and adhere to CFSA Best Practices, which prohibit any criminal recourse.”

A key provision of the CFSA’s Best Practices is that no member personal loans company will threaten borrowers or pursue criminal action against them in relation to a customer’s check or account going unpaid.

“We stand ready to work with regulators and policymakers to block rogue lenders and debt collectors from pursuing criminal complaints,” said DeVault.

Washington State House bill requires debt collectors to provide proof

In early March, the Washington state House of Representatives unanimously passed a bill that would require debt collectors to provide indisputable proof that a borrower has been notified of a potential lawsuit before an arrest warrant can be issued. The bill is expected to pass the state Senate and meet the approval of Gov. Christine Gregoire. A trade group representing debt collectors has also come out in support of the legislation in light of the fact that some rogue debt collectors have abused existing laws.

Nationally, the Federal Trade Commission is currently investigating aggressive debt collection practices.

Sources

BusinessWire

Community Financial Services Association of America

Wall Street Journal

A word from CFSA President Darrin Andersen

Previous Article

« Bridge Loan basics: Financing short-term obligations

A bridge loan is used most often to fill the gap of financing between purchasing houses, but people are finding other ways to use them now. Bridge
Next Article

Good news bad news for consumers as AT&T bids to buy T-mobile »

AT&T has made a $39 billion bid to purchase T-Mobile. If the DOJ and FCC agree, it would create the largest wireless company in the United States. AT&T logo

Leave a Reply

Other recent posts by Steve Tarlow

Relocated for work? Consider deducting moving expenses

Moving expenses can be tax deductions, as long as they are business related. It doesn't matter if you are an employee or self-employed.
A man carrying moving boxers down a flight of stairs.

College financial aid advice for middle-class families

Finding financial aid for middle-income families is easier if you have a plan. Search for need- and merit-based, and don't forget tax breaks.
A young female graduate in black cap and gown.

Experian to include rental data in credit reports

Thanks to Experian RentBureau, some tenants will now be able to contribute to a good credit score by maintaining consistent rental payments.
A “For Rent” sign.