The Federal Deposit Insurance Corp. (FDIC) is reviewing bank payday loan styled products. As a result of a letter from Americans for Financial Reform, as reported by Matthew Kish Business Journal staff writer- Portland Business Journal, the FDIC sent a letter back to AFR indicating their interest.
Tom Unger, a spokeshole for Wells Fargo, says their program is different than a payday loan. “It’s not meant to be a regular form of accessing credit,” Unger said. “It’s meant strictly for short-term emergencies.” Unger said the bank also charges lower fees than payday lenders, according to reporter Matthew Kish.
Do these bankers really think we are that stupid? That the regulators at the FDIC are that stupid? Well… yes they do!
Let’s see. Every web site or store owned and operated by a state regulated Lender has specific language stating payday loans are meant for short-term financial challenges – ONLY. CFSA’s best practices insist this language be clearly stated or they throw you out of their organization!
Banks like Wells Fargo and U.S. Bank charge lower fees? Perhaps they do. It depends on the specific bank product and if all the bank account fees are lumped in with their payday loan product.
Know this! To qualify for a Wells Fargo styled payday loan, the borrower must have a bank account with direct deposit of the borrower’s paycheck into the account. The result? NO RISK TO THE BANK!! Wells Fargo is at the front of the line of creditors when the $$ are deposited into the bank account.
Know this also! Wells Fargo does NOT disclose the APR of their “short-term” payday loan product as does all payday loan lenders.
Frankly, I don’t care about any of this. I welcome competition from banks. Those of us in the payday loan space and kick the bank’s butts all the way to China. We offer competitive rates, speed, no-hassle, 24/7 small dollar loans. The banks can’t touch us!
Read Matthew Kish at Portland The Portland Business Journal: Read in full.
AFR Letter
FDIC Letter #1
FDIC #2
