The growing demand among the consumers has largely contributed to the success of the payday loans industry today. It is also due to the fact that there have been innumerable changes in the financial services market over the last few years.
The financial companies decided to do away with short-term loans due to their high-cost structure as it was not worthwhile dealing with them. There had to be a way for people to have easy access to cash in times of need and benefit from short-term loans. Thus was born the payday loans industry.
The payday advance system began in the early ’90s of the twentieth century and has grown to be a force to reckon with today. Industry experts estimate that over twenty thousand payday loan centers across the US offer payday loans to the extent of $38 billion to millions of employed Americans who are in need of urgent funds between two consecutive pay days.
The payday advance industry has made way for increased employment to more than 50,000 Americans who earn $2 billion in wages that generates about 2.6 billion US dollars by way of federal and state taxes. This way, the payday loan industry has benefited not only the working class by tending to their urgent cash needs but also contributes to the federal and state economies.
With the growth of the payday loans industry, the Community Financial Services Association of America (CFSA) was founded with industry leaders from large and small public and private companies as its Board of Directors.
CFSA is the national association of regulated payday loan lenders. The primary objective of the CFSA is to ensure consumer confidence and the success of the payday loan industry. It also recommends protection to consumers that have been tricked by scammers into paying huge sums of money as fees on such loans.
In April 2012, there were reports of such cheating by a group of illegally operating companies who managed to fleece consumers of over $5 million over a period of two years. Federal Trade Commission (FTC) succeeded in stopping the illegal operations and this action of the FTC was lauded by the CFSA.
CFSA advocates that the members adhere to an efficient code of conduct by which collection of debts would be done in a more professional and lawful manner ensuring consumer protection. With regulatory bodies like CFSA, it is no wonder that payday loans are becoming more and more popular among the masses.
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