Your recent editorial on payday lending ("Rein in payday loans," Aug. 25) is a rare combination of falsehood, misinterpretation, and bias. It presents an inaccurate picture of the payday loan industry, its customers and the important role short-term credit plays for millions of Americans. This misrepresentation is especially true in the case of lenders who are members of the Community Financial Services Association (CFSA).

You fail to recognize the payday loan industry is, indeed, legal and heavily regulated at both the state and federal level. Our members are licensed lenders that comply fully with all federal laws and the laws in each of the 35 states in which they operate. In fact, we take consumer protection so seriously that our members adhere to a strict set of mandatory best practices that provide safeguards which include — at no charge — an extended payment plan for borrowers who want more time to repay their loan.

The truth is that among other credit options, a payday loan may be the smartest option when consumers consider the often higher cost of bouncing a check, paying overdraft protection fees, or incurring late-payment penalties.

And while the cost of many loans can be implied as an annual percentage rate, this is not a good measure of the cost of payday loan. These are a two-week or four-week loans with one flat fee based on the total amount borrowed. The cost is typically $15 per $100 borrowed. Using APR distorts the true cost of a short-term loan, which is why CFSA members also disclose the cost as a simple dollar amount.

Millions of Americans use short-term credit each year, and they would be better served by a well-reasoned discussion that goes beyond the rhetoric and identifies solutions to best meet their credit needs. As consumers continue to face ongoing household-budget pressures, as well as high un- and under-employment rates, Maryland lawmakers must work to balance important protections with preserving access to credit.

Dennis Shaul, Alexandria, Va.

The writer is CEO of the Community Financial Services Association of America.