The Department of Defense is trying to do something good for servicemembers by closing loopholes in the Military Lending Act that can leave military personnel vulnerable to predatory lenders. But these safeguards are now the target of a Congressman who has received substantial campaign contributions from payday lenders. [More]
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House Panel Strikes Provision That Would Delay Added Military Lending Act Protections
By 4.30.15
Yesterday we reported that Congress would make a decision whether or not it would intervene to slow the Department of Defense’s work to create new rules aimed at closing loopholes in the Military Lending Act that often leave military personnel vulnerable to predatory financial operations. Thankfully, legislators saw the need for more protections regarding military lending and determined the rules could go into effect as planned. [More]
Congress May Delay Predatory Lending Protection For Military Personnel
By 4.29.15
The Military Lending Act prevents military personnel from being caught in revolving debt traps of triple-digit interest loans from predatory financing operations like payday and auto-title lenders, but there are loopholes that allow some lenders to get around the MLA’s 36% APR interest rate cap, resulting in the loss of millions of dollars to servicemembers each year and raising issues of national security. The Dept. of Defense is currently working toward new rules that would add protections for military personnel, but Congress may intervene to slow the DoD from making progress. [More]
Fifth Third Bank Has 100 Million Reasons To Want To Keep Offering Payday-Like Loans
By 1.27.15
When the four banks still offering customers payday loan-like services announced they would discontinue their often under-fire products, they likely knew their bottom-line would take a hit. One of those institutions, First Third Bank announced this week that changes to its program resulted in the loss of millions of dollars in revenue, providing an example of why it can be difficult to persuade lenders to ditch the profit-making, but financially devastating programs. [More]
Fifth Third Bank Backtracks On Its Pledge To End Payday Loans
By 11.4.14
In early 2014, the four major banks still offering customers payday loan-like services announced they would discontinue their often under-fire programs by the end of the year. Apparently Fifth Third Bank has changed its mind, announcing plans to continue with a revised, supposedly less harmful version of the service for existing customers. But consumer groups say the revamped service doesn’t actually address the problems that led banks to discontinue programs in the first place. [More]
A Small Victory Against Predatory Lending? Regions Discontinues Payday Loan Product
By 1.15.14
It’s only a small victory in the battle against predatory loans, but there’s now one less bank offering a high-risk payday lending product to consumers. Regions Bank has closed the door on its payday loan-esque deposit advance product. [More]
FDIC & OCC Ask Banks To Please Stop Issuing Payday Loans As “Direct Deposit Advances”
By 11.21.13
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]
Wells Fargo Customer Explains How $500 Loan Resulted In $3,000 In Fees
By 7.26.13
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]
