June 10, 2009

Advance America , 320 Euclid Ave , Des Moines, IA 50313                       

LoanMax, 5803 Hickman Rd., Des Moines, IA 50322                                                                      

EZ Money, 2740 Douglas Ave., Des Moines, IA 50310

 Dear Payday Lenders:

 On Wednesday, June 10, 2009, members of Iowa Citizens for Community Improvement (CCI) gathered to discuss the availability of good credit in Iowa.  You had been invited to participate in this discussion, but refused to directly answer the multiple phone calls, emails, and letters that were hand-delivered to your offices.  This refusal to attend sent the message that having a dialogue with the community is not a priority for your business.

CCI is a 34-year old grassroots organization with a history of successfully creating change in Iowa.  We have been fighting for access to good credit since our founding, and we know the difference between credit that benefits the community and credit that drains us of our wealth and perpetuates a cycle of debt.  Payday lending as it is currently practiced is not good credit.  Crushing interest rates and unrealistic payback periods make it impossible for most Iowans to escape the payday lending debt cycle after just one loan. 

Our community deserves better than 400% interest rates and loans due in full in just two weeks.

We have devised an alternative to payday lending that we implemented recently in partnership with a local bank.  This program has been incredibly successful, and the parameters of these loans represent exactly the sort of lending that is needed in our community.  These loans range from $250 – $1500, have a fixed APR of 12%, and can be paid back over one to three years.  A commitment to budgeting and credit repair is essential to the success of these loans. 

We strongly recommend that you change your lending standards to conform to these guidelines.  We propose that you meet with a leadership team of five CCI members in the next two weeks to discuss options to make fair lending and sustainable credit available to all Iowans.  Greater access to sustainable credit is mutually beneficial to your business and the community you serve.  Contact CCI at 515-255-0800 as soon as possible to schedule this meeting.

Sincerely,

Members of Iowa Citizens for Community Improvement