in an RTF file - National Installment Lenders Association _NILA_ Home

							Dear Decision Maker,

As a constituent and employee in the financial services industry, I am concerned with
legislation that would set arbitrary limits on the APR that may be charged for installment
loans. I am particularly concerned with the effect of such legislation on my employer
who operates a highly regulated consumer installment lending company, providing small
installment loans to customers across the state.

Millions of families rely on installment loans to meet their financial needs. Most are
honest, hard working people who occasionally have the need for short term credit due to
unforeseen financial emergencies. During the current period of unprecedented volatility
in the credit markets, it is vital that these consumers maintain access to credit. As banks,
thrifts and other financial institutions refuse to extend credit to our customers, it is
imperative that this valuable source of credit be maintained.

Of course, installment loans not only help local families, they help the community. The
majority of customers who have installment loans live within a 20 mile radius of the
branch they use - and that money is poured right back into the community helping local
businesses survive.

We make short-term installment loans and because these loans are intended to be paid
back quickly, the APR is not an accurate measure of the loan's true cost. For example, on
a $300 loan repayable in equal payments over six months with an APR of 36 percent, the
total charge for interest would be less than $5.50 per month. Under this cap, it is not
possible for a branch to pay even its fixed cost. Moreover, not everyone we lend money
to repays the loan, meaning we have to write some loans off as expense.

Legislation that reduces our rates and forces a well-run highly regulated industry out of
business will not solve our customers need for short term credit, but it could force them
into a deregulated, unsupervised, uncontrolled situation. The intentional collapse of yet
another industry will put thousands of people out of jobs at a time when our country is
already facing the highest unemployment rate in years.

As credit availability shrinks and borrowers, particularly low and moderate income
borrowers, see traditional forms of credit dry up (e.g., credit cards, unsecured bank loans,
and home equity lines of credit), it is imperative that borrowers maintain access to
alternative forms of short term credit, such as installment loans.

Before casting your vote on this legislation, I invite you to visit a local branch to meet our
employees and our customers. It is important that you take the time to truly understand
the full impact of this legislation. What may appear to be a quick simple way to stop the
abusive practices by a few in the industry, will actually eliminate a source of funds to a
large part of the population - your constituents who have no other access to credit.
Sincerely,