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High-Cost Installment Loans: No Improvement Over Payday Loans

Wednesday, August 2, 2017
Rebecca Borné | Center for Responsible Lending

Until 2013, a handful of banks were siphoning millions of dollars annually from customer accounts through “direct deposit advance” — products that carried average annualized interest rates of up to 300%. Like storefront payday loans, deposit advance was marketed as an occasional bridge to a consumer’s next payday. But also like storefront payday loans, these bank products trapped borrowers in long-term, debilitating debt.