A recent piece by Ed Mierzwinski of the U.S. Public Interest Research Group ["Regulators Play 'Whack-a-Mole' With Predatory Lenders," August 13] vilifying the short-term, online lending industry as "predatory" grossly misrepresented companies focused on serving the very real financial needs of the consumers he claims to support.
Millions of consumers used an online, short-term loan over the past year to meet the immediate credit needs of their families. Our industry has seen a significant increase in demand for these credit products since the housing collapse in 2008 when other credit options were eliminated or reduced. They no longer have the ability to use a credit card or home equity line to find $300-$500 necessary to meet a short term need. Oftentimes they only need a few hundred dollars to avoid bank non-sufficient funds fees, a utility reconnection charge or a late payment fee. An online, short-term loan can be cheaper than any of these alternatives. Our customers know this which is why so many come back to our member lenders when in need.
Credible online lenders, like those who are members of the Online Lenders Alliance, abide by a strict code of conduct and adhere to best practices that ensure customers are treated fairly and the loan terms and repayment options are clear ... all from the safety and comfort of their homes.
Unfortunately, many so-called consumer groups are critical of small dollar loans offered by our members yet they offer no alternatives to the consumers who go online and seek these loans every day. Now, state and federal government entities are attempting to prevent consumers from accessing this important credit alternative by pressuring banks and payment processors to stop legal, customer-authorized transactions. There aren't laws being broken or a new one on the books. These government regulators simply don't like the industry, yet offer no alternatives to consumers.
The Online Lenders Alliance and its member companies will continue to fight any attempts to take this important form of credit away from our customers who rely on it.
President & CEO
Online Lenders Alliance