Continued reporting on the payday loan industry by New York Times reporter Jessica Silver-Greenberg:
“JPMorgan, the nation’s largest bank by assets, will give customers whose bank accounts are tapped by the online payday lenders more power to halt withdrawals and close their accounts.”
“Under changes to be unveiled on Wednesday, JPMorgan will also limit the fees it charges customers when the withdrawals set off penalties for returned payments or insufficient funds.”
“JPMorgan said that the bank will charge only one returned item fee per lender in a 30-day period when customers do not have enough money in their accounts to cover the withdrawals.”
No doubt, there are still some “bad players” in our industry. But the days of automatic roll-overs, multiple ACH’s resulting in excessive consumer bank fees… are coming to an end and the smart guys know it.
Forward thinking, long-term “players” in the payday loan space have understood the necessity of embracing best practices, strong branding, acceptance of compliance and disclosure, and great customer service as basic requirements for long-term profitability in the AFS (Alternative Financial Services) space!
The payday loan product is evolving. Millions of consumers use them – or some form of AFS product - world wide. The payday loan industry is maturing and iterating. “Bad guys” will be pushed aside while responsible Lenders will profit handsomely.
Ultimately, consumers of AFS products will decide who the winners and losers are, not the regulators or the banks. Jer – Trihouse
Link to the Jessica Silver-Greenberg piece.
Link to The New York Times piece.