Local banks getting into payday loan business

Local banks getting into payday loan business

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from article:

Big banks are getting into the payday lending business, creating competition for the storefront operators and stirring the ire of consumer advocates.

The banks call it a convenience for customers facing unexpected bills. Critics say the banks are luring the unwitting into an expensive cycle of debt.

In the St. Louis market, at least three banks will make customers a payday-like loan through their checking accounts: US Bank, the biggest player in the local banking market, Regions Bank and Fifth Third Bank.

Banks often call them "advance" loans. They typically charge $10 for every $100 lent, and they collect from electronic deposits of paychecks or Social Security. Storefront payday shops charge an average of $17 for a two-week loan of $100, according to figures from the Missouri Division of Finance.

Read more: http://www.stltoday.com/business/local/article_1d68ea2d-4312-54dd-8cee-ee6d6a86d457.html#ixzz1akw7c9P3
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this is old news, banks been doing this for a long, long time.