Your editorial criticizing the Short-Term Financial Services Loan Act did nothing to advance the public debate on a critically important issue — the need for small-dollar credit in New York ("No loan sharks welcome," May 2).
The bill keeps these unsecured, small-dollar loans within the state's statutory usury annual percentage rate of 25 percent. Even including fees commonly associated with similar loan products, the total cost is significantly below those of Internet payday loans.
A significant and growing demand exists for small-dollar credit. Banks and other financial institutions have demonstrated no interest in making such loans. This legislation would allow the state's licensed check-cashing industry to fill the need by offering small-dollar installment loans.
The bill also protects consumers from predatory high-cost loans offered over the Internet by unregulated, out-of-state lenders. This legislation would make New York one of the only states to protect its citizens from such debt.
Regarding your characterization of our industry as high-priced, we offer products and services with fees that are among the lowest in the nation. More than half our customers also have bank accounts. They patronize our businesses because they offer convenience, instant liquidity and lower fees than they get from banks. They use our stores because they chose to, not because they have to.
Organizations like the Neighborhood Economic Development Advocacy Project have said "no" to this act yet fail to provide any real-world alternative. By not engaging in constructive dialogue, they have demonstrated a lack of leadership on an issue vital to their constituents. This legislation addresses a critical need facing millions of New Yorkers. It deserves to be debated by the Legislature and not vilified in the press.
Ira Krell
president, Financial Service Centers
of New York,
Hackensack, N.J., and New York City