Founded in 1916, the American Financial Services Association is the primary trade association for the consumer credit industry, protecting access to credit and consumer choice. AFSA provides the consumer credit industry and the consumers it serves with a voice in Washington, D.C., where the association isheadquartered. AFSA members provide consumers with many kinds of credit, including traditional installment loans, direct and indirect vehicle financing, mortgages, payment cards, and credit for non-vehicle retail customers.
AFSA's mission is to promote responsible, ethical lending to responsible, informed borrowers and to improve and protect consumers' access to credit.
AFSA MEMBERS – PRODUCTS AND SERVICES
Current corporate membership includes 360 Active (consumer credit and commercial finance companies nationwide, Business Partners (industry suppliers), and Affiliate (state associations). AFSA members do not provide payday or vehicle title loans.
Traditional Installment Lenders and Sales Finance Companies
Companies that provide fixed rate, fully amortized loans which determine a borrower's ability to repay. Companies that provide traditional installment loans, report payment activity to credit bureaus, do not charge penalties for early repayment and do not require balloon payments. Companies that do not require the borrower to agree to a pre-authorized automatic withdrawal in the form of a bank draft, a pre-approved ACH or its equivalent.
Vehicle Finance and Leasing Companies
AFSA is the only association that brings together captive vehicle finance companies, indirect auto finance subsidiaries of banks, and independent auto finance companies that provide financing through franchise and/or independent dealers.
Mortgage Lenders and Servicers
Companies that provide or service first or second mortgages or home equity loans, manufactured housing loans and other loans secured by a borrower's residence.
Payment Card Issuers
Companies that offer credit and debit cards, and/or private label retail or other credit cards.
Commercial Finance Companies
Companies that provide business-to-business commercial financing and/or inventory financing for independent auto dealers.
AFSA GUIDING PRINCIPLES
Regulation & 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 affected 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 & 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.