Payday Advances Not Same as Loans

Payday advance services are not loans, and their fees are not comparable to an annual percentage rate [“States Urged to Curb ‘Payday’ Loan Gouging” Feb. 2].

Consumers obtain these services as part of a short-term cash-flow decision, not a long-term loan or credit decision. The fees charged are fixed, a set percentage of the amount advanced. An annual percentage rate does not apply to a one-time, flat-rate fee like that charged with a payday advance.

The payday advance industry provides a service that is both needed and wanted. Our consumers are middle-income wage earners with steady jobs and checking accounts. They want and need these services in times of financial emergencies--whether to fix their car or pay for unexpected medical expenses.

In order to best serve these consumers, the payday advance industry is committed to ensuring fair business practices. And, in turn, we expect lawmakers and consumer groups to carefully examine all the facts when coming to a determination on our services.

JAMES W. BALL

President

California Financial Service Providers

Sacramento