Guiding Principles
AFSA is the primary trade association for the American consumer credit industry, protecting access to credit and consumer choice. AFSA members provide consumers with many kinds of credit, including traditional installment loans, mortgages, vehicle finance and cards. AFSA provides the consumer credit industry and the consumers we serve with a voice in Washington and access to th
e media and investment community. It also provides research, policy advice and issues management at both the federal and the state level. AFSA promotes best practices within the industry through discussion within areas of business and committees of professional interest. AFSA is committed to consumer credit education and voluntary credit counseling. Regulation and the Market
AFSA believes competition and innovation in the marketplace tend to reduce price, increase consumer choice and thus benefit consumers. AFSA believes that regulation should be a collaborative process between regulators and the parties directly impacted by the proposed regulations. Government, consumers and the credit industry can and should work together to promote lending that helps consumers meet their financial needs through affordable credit. The extension of credit must be affordable by both the lender and the borrower. Risk-based pricing increases access to credit for the less creditworthy and reduces relative pricing for the more creditworthy, thus benefiting all consumers. The secondary market is critical to the continued availability of certain kinds of credit. Thus loan features which protect fixed-income investors can provide value to consumers and investors alike. Market funding gives consumer lenders the ability to make affordable loans to millions of qualified consumers. State and federal governments should always promote and ensure a level playing field between all of the entities comprising the financial services industry – banks, credit unions and finance companies. Education and Responsibility
We believe that clarity and transparency should be maximized in all credit transactions. Responsible lending is transparent lending. Responsible underwriting procedures intended to make a reasonable assessment of the customer’s ability to pay should be employed in any extension of credit. The success of a consumer credit company should be based on the performance of its loans and the satisfaction of its customers. Responsible lenders do not look to benefit from loans that fail, nor that create a cycle of debt. Financial education should be taught in schools. Borrower financial literacy should be improved to include basic budgeting skills, an understanding of credit products, and how some carry a greater or lesser risk of chronic indebtedness. Borrowers should also understand how to assess the cost of a loan, looking at APRs for longer loans and finance charges or the charge as a percentage of the amount financed for smaller loans. Society needs to reinforce responsible borrowing practices and emphasize accountability in personal decision-making.
