PDL critics target banks
April 5, 2010 | alternatives, federal legislation, industry | Comments (1)I guess they just want to destroy the entire short-term credit market. From the Minnesota Independent:
Banks including Wells Fargo and U.S. Bank are giving customers advances on their paychecks, typically for a fee of $10 per $100 borrowed, which translates to an annual percentage rate of 120 percent or higher, if repaid in under one month, according to a report by the Center for Responsible Lending.
“These products ensure that many borrowers will end up trapped in cycles of debt,” the report stated. “Unless the OCC and other bank regulators take action with regard to bank payday loans, these products will likely proliferate throughout the banking industry as financial institutions look for new sources of fee income.”
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Wells Fargo defended its loan product as a service to existing customers caught in an emergency, whose high cost is fully disclosed and complies with state and federal law.
“Wells Fargo does not consider our Direct Deposit Advance Service ‘exploitative’ nor is it a ‘payday loan,’” spokeswoman Richele Messick said in an email response to questions. “We reach out to customers at all stages of their usage of the service, reminding them of the expense of this product and encouraging them to seek less expensive alternatives.”
Someone should tell this Well Fargo spokeswoman that facts and logic will not sway the anti-business critics.
Comments»
Yeah, man. No one should ever charge interest. That’s not fair. Profits are only for greedy corporations.
Health care is now on the path to nationalization, in the name of the “rights” crowd. Banking, housing, transportation, food, entertainment, apparel, toys, and bubble gum are just a matter of time.