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.
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- National Bank Regulator Enabled Overdraft Abuses
February 24, 2010
The OCC has acknowledged problems with bank overdraft systems but has allowed the banks they regulate to use them.
- Comment: Implementation of Military Lending Amendment
February 26, 2008
Comments on Implementation of Limitations on Terms of Consumer Credit Extended to Service Members and Dependents
- Comment: To Department of Defense on Military Lending Act
February 8, 2007
Comments on Military Lending Act submitted to Department of Defense by Consumer Coalition on Feb. 5, 2007.
- Small Loan CRA Comment
February 2, 2007
CRL Comment to the Federal Deposit Insurance Corporation on its proposed guidelines for affordable small-dollar loans.
- Comments: RIN 3064-AC95, Proposed Rulemaking on Federal Preemption
December 13, 2005
The Center for Responsible Lending submits these comments on the proposed rules, ere part of a larger package of preemption rules urged upon the FDIC by the Financial Services Roundtable.