FDIC & OCC Ask Banks To Please Stop Issuing Payday Loans As “Direct Deposit Advances”

FDIC & OCC Ask Banks To Please Stop Issuing Payday Loans As “Direct Deposit Advances”

While many payday lending operations are not directly tied to federally insured banks, some of the biggest names in banking — most notably Wells Fargo — offer what are effectively payday loans via “Direct Deposit Advance Loans.” But today the FDIC and the Office of the Comptroller of the Currency have given some guidance to the banks they regulate, basically saying “That’s enough of that, don’t ya think?” [More]

Would You Order Something More Expensive If You Knew A Stranger Would Pay For It?

Would You Order Something More Expensive If You Knew A Stranger Would Pay For It?

Upon first reading, the tale of woe from a person who is upset at getting a free coffee from a stranger — because he would’ve ordered something way more elaborate and expensive if he knew he wouldn’t have to pay for it — makes my face feel like exploding into a thousand tiny pieces of rage. Each of those pieces is screaming, “YOU UNGRATEFUL PIECE OF HUMAN GARBAGE!” But let’s think about this. [More]

Where Did All Those Internet Payday Loan Ads Go?

Where Did All Those Internet Payday Loan Ads Go?

High-interest short-term loans are illegal in many states, but for a brief moment, lenders sought customers in these states anyway. In ads online and on TV, you may have noticed them: commercials that played up the companies’ Native American ownership, which made them totally legal in states where payday loans are normally illegal. “Nice try,” said state regulators. [More]

(mightynine)

Consumers Saved $4 Billion In Credit Card Fees Last Year, But Fewer Have Access To Credit

It’s been four years since lawmakers passed the CARD Act, a massive set of reforms for the credit card industry. As a result, consumers have saved billions in fees and other charges, but access to credit has also become more difficult for some people. [More]

(stuarpilbrow)

What’s Worse Than A Payday Loan? A Payday Loan Scammer

Short-term, high-interest payday loans are illegal in several states, but that doesn’t stop consumers from trying to get their hands on quick cash. So when they see a website offering to hook them up with a payday lender and get them up to $1,000 in about an hour, it may seem like a good deal. That is, until that loan never shows up and the borrower has even less money in her bank account. [More]

If you can't pay back the 0% interest loan in full within 30 days, TitleMax refers you to an out-of-town lender that can refinance the loan at a triple-digit interest rate.

Auto-Title Lender Skirts Law By Giving Away Cash For Free

Several cities in Texas have recently enacted laws intended to drive out or rein in short-term, high-interest lenders offering auto-title loans, in which borrowers put up their cars as collateral for short-term loans averaging around $1,500. But one lender has figured out a way to get around those laws — by giving away free cash and redirecting customers elsewhere when they need to refinance. [More]

(Fox 2 Now)

Actual Living, Breathing Human Wins Publishers Clearing House Prize Of $5K A Week — Forever

Every time the doorbell rang when I was growing up, I knew without a doubt that it would be the prize crew from Publishers Clearing House on my doorstep with a big, fat check, and that I’d be able to keep myself in LEGO, Barbies and Pixie Sticks for a lifetime. But the actual odds of winning PCH’s “Forever” Prize — $5,000 per week for life — are about 1 in 1.215 billion.* As such, the doorbell usually heralded the Fuller Brush Man or one of my neighborhood pals, and I had to find money in the lemonade stand. [More]

Online Payday Lender Western Sky To Stop Funding Loans Sept. 3

Online Payday Lender Western Sky To Stop Funding Loans Sept. 3

If you’ve watched daytime TV in recent years, you’ve more than likely seen ads for Western Sky Financial a payday lender operating out of a tribal reservation in South Dakota. Facing lawsuits from around the country and increased scrutiny from regulators over triple-digit interest rates for its short-term loans, the company has announced it will stop funding new loans on Sept. 3. [More]

(frankieleon)

How Payday Lenders Fought To Stay Legal In Missouri

The state of Missouri has about one payday or car-title lender for every 4,100 residents. The interest rate on short-term loans has an average APR of 455% statewide, when the national average is a still-horrific 391%. When a coalition of churches, unions, and community groups tried to cut the maximum interest rate to 36%, the effort failed miserably. Here’s why. [More]

(D.Michelson)

$11 Million Penalty Apparently Wasn’t Enough To Stop Scammy Telemarketers

Back in 2007-8, the Federal Trade Commission shut down a sketchy telemarketing company called Suntasia Marketing, Inc., for defrauding consumers and charging their bank accounts without consent programs they never enrolled in, like memberships in discount buyer’s and travel clubs. Two of the defendants behind the scam were hit with $11 million settlements and barred from getting involved in these sorts of shenanigans in the future, but that apparently wasn’t sufficient penalty to set them on a righteous path. [More]

(Mark Griffith)

More Than A Million People Can’t Get Bank Accounts, Many Because Of Minor Past Errors

Many of us have had that sinking feeling that comes with realizing there’s just not enough money in your bank account to cover a purchase, or received a notification saying as much. It’s no fun, but it happens to plenty of people. Now imagine that even just one of those overdrafts could prevent you from getting a bank account in the future. [More]

Wells Fargo Customer Explains How $500 Loan Resulted In $3,000 In Fees

Wells Fargo Customer Explains How $500 Loan Resulted In $3,000 In Fees

Wells Fargo claims that its Direct Deposit Advance loans are not payday loans, in spite of the fact that they are short-term, high-interest loans that are supposed to be paid off at the borrower’s next payday. One California woman says she assumed that Wells Fargo wouldn’t be steering her into a sketchy payday-like product, but then she ended up going around the debt carousel 63 times in five years — and paying $3,000 in fees on a $500 loan. [More]

Rent-To-Own Car Tires Become Popular, Are A Terrible Idea

Rent-To-Own Car Tires Become Popular, Are A Terrible Idea

Having to get new tires is annoying. They’re not cheap and you usually have to buy four of ‘em at once. If you don’t have a few hundred dollars at hand or available on your credit card, what do you do? A growing number of Americans in that predicament are turning to rent-to-own tire stores, where they pay overinflated prices on consumer-unfriendly terms. [More]

(eyetwist)

Report: Some Credit Unions Are Still Involved In Payday Lending

Loans from federal credit unions are currently capped at 18%, though some qualifying short-term loans can go as high as 28% (plus a $20 fee). These numbers are far below the standard three-digit APRs you see on payday loans, but a small number of credit unions are still figuring out ways to hook customers up with these questionable, high-interest loans. [More]

(frankieleon)

How Predatory Lenders Get Around The Law To Loan Money To Military Personnel

In spite of the Military Lending Act, a law intended to prevent predatory lenders from gouging military personnel with exorbitant interest rates and mountains of fees, some of these lenders have figured out ways to work around the very specific limits of the law, targeting active-duty service members with loans that are almost indistinguishable from the ones forbidden by the Act. [More]

(ChrisGoldNY)

Installment Loan Borrowers Being Saddled With Unnecessary Insurance Add-Ons

Installment loans are typically, shorter-term, high-interest, loans to borrowers with severely damaged credit. These loans usually have longer terms than the 2-3 week turnaround for payday loans, and the borrower agrees to pay the money back in equal, monthly installments, but some of those who have worked at installment lenders say these loans are laden with charges aimed at getting around interest-rate rules and keeping the borrower in a cycle of indebtedness. [More]

(her name is meg)

Report Claims Payday Loans Result In Net Loss Of Money, Jobs

Among the reasons given in support of payday loans — short-term, high-interest loans intended to get the borrower through to the next paycheck — is that they ultimately provide a net good to the economy, allowing the borrower to keep spending and earning interest for the lender. But a recent report casts some doubt on that belief. [More]

(afagen)

State Lawmakers Consider Limits On ‘Payday’ Lawsuit Loans

We’ve written a lot over the years about standard payday loans — short-term, high-interest loans from non-bank lenders — and similar deposit-advance loans offered by some of the nation’s largest banks. But there is a growing form of short-term loan that lawmakers are concerned about — loans to plaintiffs of pending lawsuits. [More]