At least two nationally chartered banks are offering their own version of payday loans, with high fees and short-term balloon payments similar to those that cause the typical payday borrower to become trapped in long-term debt.
Because the entire loan must be repaid in short order, borrowers are likely to have difficulty both retiring the loan and meeting their other obligations. As a result, these borrowers—like the typical customer of payday loan stores—will likely take out a series of back-to-back loans, staying indebted for a significant portion of the year.
The Office of the Comptroller of the Currency (OCC) is responsible for regulating these banks, and has so far failed to stop the predatory practice, making more Americans vulnerable to predatory short-term debt traps as it spreads.
Search Payday Lending - Policy & Legislation - Regulators
Browse Payday Lending - Policy & Legislation - Regulators
- U.S. Senators ask Regulators to Stop Bank Payday Lending
January 7, 2013
Five U.S. Senators have asked the OCC, the FDIC and the Federal Reserve to stop the banks under their respective jurisdictions from making predatory payday loans. At least four big banks have started making the triple-digit interest loans, which are virtually identical to the predatory payday loans that trap borrowers in long-term, high-cost harmful debt.
- CRL Comments on Proposed Rules for NCUA Payday Alternatives Loan Program
November 30, 2012
CRL urges the NCUA to structure their Payday Alternatives Loan (PAL) program to reflect the broad range of alternatives, to prevent the program from operating like a series of high-cost payday loans and to prevent credit unions from engaging in payday lending outside of the PAL program.
- FDIC Promises Investigation of Bank Payday Lending
May 31, 2012
The FDIC has promised that to make investigation of bank payday lending a priority investigation. In response to a letter submitted by 250 advocates, Acting Chairman Martin Gruenberg said the banking regulator is concerned that banks are violating guidelines for fair and affordable products.
- Comments to the Consumer Financial Protection Bureau on Payday Lending Abuses
April 23, 2012
Comments to the Consumer Financial Protection Bureau on payday lending abuses on behalf of several organizations concerned about the documented abuses of payday lenders.
- Letter to Bank Regulators: Stop Bank Payday Lending
February 22, 2012
Two hundred and fifty national, state and local organizations and individual advocates have asked bank regulators to stop banks from making predatory payday loans, which carry triple-digit annual interest rates of as much as 400 percent.