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Sun Feb 24, 2013, 06:17 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 General Discussion.

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Reply Banks' support of payday lenders under scrutiny (Original post)
TexasTowelie Feb 2013 OP
mbperrin Feb 2013 #1

Response to TexasTowelie (Original post)

Sun Feb 24, 2013, 11:23 AM

1. Hmm, big banks screwing over ordinary people in illegal, scofflaw


Yeah, what did you THINK banks do?

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