Payday Lenders Say Poll Shows Military Are Just Small Part of Biz

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A new national poll "debunks the widely publicized notion that a large percentage of payday lenders' customers are military personnel," according to the payday advance industry, which commissioned the poll.

According to the Consumer Financial Services Association of America (CFSA), a trade group for the payday advance lenders, the survey found that just 3.69% of military personnel had taken out a payday advance loan during the past five years. The survey of active-duty military personnel was conducted by Penn, Schoen & Berland Associates. Of that group, just 1.18% had an advance outstanding, the CFSA said.

"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," CFSA said. "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 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."

'Shared Concern'

The CFSA said that last year it 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."

Those 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.

* Instituting efforts to strengthen the financial knowledge of military personnel.

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