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Sun Feb 24, 2013, 06:22 AM

Banks' support of payday lenders under scrutiny

Major banks have quickly become behind-the-scenes allies of a raft of Internet-based payday lenders that offer short-term loans with interest rates sometimes exceeding 500 percent.

With 15 states banning payday loans, a growing number of the lenders have set up online operations in more hospitable states or far-flung locales such as Belize, Malta and the West Indies to more easily evade statewide caps on interest rates.

While the banks, which include giants such as JPMorgan Chase, Bank of America and Wells Fargo, do not make the loans, they are a critical link for the lenders, enabling the lenders to withdraw payments automatically from borrowers' bank accounts, even in states where the loans are banned.

In some cases, the banks allow lenders to tap checking accounts even after the customers have begged them to stop the withdrawals.

More at http://www.chron.com/news/houston-texas/houston/article/Banks-support-of-payday-lenders-under-scrutiny-4303453.php .

[font color=green]The major banks benefit from the revenue stream due to overdrafts that are caused by EFTs. Preying on the poor exacerbates the downward spiral of the high-interest loans.

Where are the RICO laws when they are needed?[/font]

Cross-posted in Texas Group.

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Reply Banks' support of payday lenders under scrutiny (Original post)
TexasTowelie Feb 2013 OP
datasuspect Feb 2013 #1
dkf Feb 2013 #2
Turbineguy Feb 2013 #3

Response to TexasTowelie (Original post)

Sun Feb 24, 2013, 07:46 AM

1. the mafia doesn't charge as much interest on a juice loan

 

payday loan companies are worse than the mob.

and it's LEGAL.

thank you bought and paid for government!

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Response to TexasTowelie (Original post)

Sun Feb 24, 2013, 08:09 AM

2. Do you really want your bank judging your automatic payments?

 

Banks execute your requests. They have guidelines to look out for money laundering or terrorism. But beyond that they aren't going to stop payments to legal entities.

It's ridiculous that people expect banks to shut down or stymie legal activities. If we want banks judging the morality of all businesses I'm sure there are a lot more areas to expand into.

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Response to TexasTowelie (Original post)

Sun Feb 24, 2013, 08:13 AM

3. Clever idea

pay day lenders make ordinary banks look good.

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