What has an APR of 20,000% and is now being attacked by CRL?
May 29, 2008 | alternatives, industry critics | Comments (1)The Center for Responsible Lending is taking aim at a foe that is not payday loans. This one has a purported APR of 20,000 percent. Can you guess?
A: Bank fees.
From the Southern Illinoisan:
Banks have changed their tactics. Whereas they used to disallow checks to clear when account funds were insufficient, they now allow debit card charges, but add a “courtesy overdraft” fee for the service. You get your Snickers or Big Mac when your account is empty; but it will cost you.This overdraft is a type of short-term loan that often figures to 20,000 percent APR.
From Lending Club:
According to a recent survey, consumers would prefer to be declined when using their debit card rather than be hit with an overdraft fee. This preference occurs regardless of the purchase price.The results of the survey, conducted by The Center for Responsible Lending, were released in mid-April.
Banks often tout their overdraft protection services as protecting consumers from an embarrassing decline of credit. I would much rather be embarrassed than hit with a huge fee. The majority of survey respondents agree. Review your bank account’s overdraft protection features to find the best option for your situation.
Comments»
ITS ABOUT TIME!!!! I think alot of our customers wouldnt need our services if it wasnt for the banks HIGH over draft charges. I have seen more than one customer that has had over $500 in fees and they only would have originally went over by about $100 anyways. After that they need to hit the Credit Card companies.