Bull
July 30, 2009 | alternatives, industry | Comments (2)Finally, someone noticed that banks are in the payday lending business, too. However, the reporter makes ridiculous, unproven assertions. From the story:
Once the sole domain of freestanding, paycheque-cashing storefronts, payday loans are proven to send borrowers deeper into debt {what utter B.S. Research disputes this charge conclusively}, while making massive profits for the lender {More B.S. Payday lenders make modest profits}, according to the National Consumer Law Centre.
The Federal Deposit Insurance Corporation changed a rule in 2005 to allow banks to enter the lucrative market of payday lending. In 2008, the FDIC issued guidelines for bank payday loans, with a suggested cap of 36 percent interest.
Wells Fargo, U.S. Bancorp and other banks have chosen not to follow the voluntary guidelines and instead are charging triple-digit interest on payday loans to cash-strapped customers, according to consumer organisations.
Comments»
I’m surprised banks have a desire to enter the payday loan space. Since their NSF fees and overdraft fees approach 1800% and more, a payday loan product offered by banks and credit unions will not be nearly as lucrative fo them!
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