More pickup of Banks/PDL story
February 26, 2010 | alternatives, federal legislation, industry, positive media coverage | Comments (1)This time the Bloomberg story appears in the Pittsburgh Post Gazette:
Banks including Fifth Third Bancorp, Wells Fargo & Co. and U.S. Bancorp already are making such loans, charging $10 for every $100 borrowed for 30 days — the equivalent of an annual interest of 120 percent. The loans, which they call “checking advance products,” are comparable to those made by so-called payday loan stores, which target customers who generally don’t have credit cards to bridge the gap until their paychecks come.
“The smarter banks are trying to resell overdraft protection to consumers as a different product,” said Elizabeth Rowe, group director of banking advisory services at Mercator Advisory Group in Maynard, Mass. They don’t call the advances “payday” loans because it’s a “very tarnished, negative brand.”
Comments»
I’ve seen this same story just about everywhere yesterday, and I can’t wait for some follow-up info/more extensive reports.
Mainly, I notice that they mention these loans are “comparable” to payday loans, but they don’t mention the fact that the banks don’t seem to have to follow the same legislation….
I saw a comment yesterday on a board (I’ll post if I run back into it!) from a Payday Loan Store operator in Ohio who says that 5/3rd (I believe) bank has been doing Payday Loans (under a different name of course) for years in Ohio as one of his major competitors, EXCEPT the fact that they seem to be above payday legislation and can offer the same product with higher interest. One of many problems when big business controls politics.
Gabe Rodriguez
Synaptic Payday Loan Solutions