WASHINGTON, DC – A new national poll commissioned by the payday advance industry debunks the widely publicized notion that a large percentage of its customers are military personnel.
The survey of active-duty military personnel conducted by Penn, Schoen & Berland Associates found that only 3.69 percent had taken out a payday advance in the last five years — and only 1.18 percent had an advance outstanding. With an active-duty military population of 1.4 million, that translates into 51,660 military personnel who have taken a payday advance in the last five years and 16,520 who have an advance outstanding.
Industry critics such as the Center for Responsible Lending and publications such as The New York Times and Norfolk’s Virginian-Pilot have clearly overstated and hyped unsubstantiated claims that military personnel are heavy users of payday advances. The Penn, Schoen & Berland poll clearly shows that isn’t the case.
“This poll confirms what payday advance customer research has shown all along. The numbers tossed around by activists and the media concerning military use of our service are clearly wrong,” said Lynn DeVault, president of the Community Financial Services Association of America (CFSA), which represents more than half of the payday advance industry. “We now have the facts from a highly respected polling firm, and we challenge the media and activists groups to stop exploiting the issue.”
Special Protections
Last year, CFSA enhanced its mandatory Best Practices standards to include special protections for military payday advance customers.
“Since the outbreak of hostilities in Afghanistan and Iraq, Americans have been rightly concerned about the welfare and readiness of our military personnel,” said DeVault. “We share that concern. And even though they make up only a small segment of our client base, our Military Best Practices will ensure that any who do business with a CFSA member company are treated fairly and with appropriate protections.”
These Military Best Practices include:
- prohibiting the garnishment of military wages or salaries;
- banning attempts to contact the military chain of command to collect payment;
- deferring collection activity for any active-duty military customer deployed to a combat zone or national guardsman or reservist called to active duty; and
- instituting efforts to strengthen the financial knowledge of military personnel.
In considering special provisions to address the unique circumstances of military customers, the association sought the recommendations of an advisory panel made up of retired military officers and senior noncommissioned officers.
“CFSA’s rules establish consumer protections and information resources specifically for members of the military,” said Army Maj. Gen. (Ret.) Steve Siegfried, co-chairman of CFSA’s Advisory Council on Military Affairs. “We have addressed important industry collection practices and created financial literacy initiatives that will significantly benefit servicemen and women.”
CFSA member companies offer small, unsecured cash advances to consumers who need a little financial help between paydays. Approval of member applications and renewals is contingent upon compliance with CFSA’s Military Best Practices.
