Payday Advances

Re “Controlling the Payday Sharks,” editorial, April 7: In exchange for a payday advance, consumers pay a reasonable fee, generally about $15 to $18 for a $100 check. Payday advances do not involve compound interest. Payday advances provide consumers with a convenient way to resolve short-term cash needs. The industry provides needed cash for those without credit cards or even credit ratings.

According to a recent survey of 502 California residents, while one-third said they would turn to a relative or friend in a financial bind, many did not cite this option. Bouncing one or more checks also is a possibility. However, with both the bank and the retailer charging a fee for a bounced check, a single bounced check can result in up to $50 in fees. Clearly the payday advance industry is providing a needed service.

ANTHONY J. SIMONE, Exec. Dir., Community Financial Services Assn., Bethesda, Md.