Posted 11 months ago on March 22, 2013, 12:04 a.m. EST by BradB
from Washington, DC
This content is user submitted and not an official statement
Big banks will now lend money at 300 percent interest without threatening to break a leg.
Then again, the payday loans some big banks are offering can have other ill effects, such as financial ruin, according to a new study by the Center for Responsible Lending. Even as public anxiety grows about the dangers of payday lending, with 15 states recently banning the practice, many big banks are offering the service to their customers.
"Despite federal banking regulators’ recognition of the abuses of payday lending and aggressive action blocking previous bank partnerships with payday lenders, a few large banks have begun offering payday loans directly through checking accounts," the study says. Large banks offering the service include Wells Fargo, U.S. Bank, Regions Bank and Fifth Third Bank.
The average annual percentage rate on a bank payday loan is 225 to 300 percent, the study says. Banks that offer payday loans extract payments automatically from the borrowers' checking accounts on the next pay cycle.