Major banks aid in payday loans banned by states, By Jessica Silver-Greenberg, February 23, 2013, New York Times: “Major banks have quickly become behind-the-scenes allies 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 like Belize, Malta and the West Indies to more easily evade statewide caps on interest rates. While the banks, which include giants like 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 entirely…”
Tag: Financial literacy
Financial Literacy Program – Massachusetts
Program teaches working poor ways to save, build credit, By Laura Finaldi, November 29, 2012, Boston Globe: “Meg Alcantara, a single mother of three, was working two jobs, but never getting ahead. She had no savings, lots of overdue bills, and hardly any hope getting a credit card, let alone ever owning a home. Two years later, Alcantara, 49, of Lynn, is working just one job and earning 63 percent more after recently gaining a promotion to office manager at a physical therapy practice. Her credit score has jumped nearly 100 points and she has put away about $5,200 toward a down payment and her dream of owning a home. Alcantara’s journey to financial stability was aided by a partnership of the Lynn Housing Authority and Neighborhood Development and a Boston nonprofit that combined an overlooked federal housing program with the financial literacy initiatives of the nonprofit, Compass Working Capital. Known as the Compass Financial Stability and Savings Program, the joint venture provides the tools for subsidy receivers like Alcantara to earn more, save more, build assets, and better their lives…”
Payday Lending
Regions, Courting the Underbanked, Defends Payday Loans, By Maria Aspan, June 18, 2012, American Banker: “For banks trying to serve more low-income customers, Regions Financial (RF) could become both a shining example and a cautionary tale. The Birmingham, Ala., bank has spent the past year trying to attract the poor, the young, immigrants and other types of customers whom most banks have long ignored. It has rolled out check-cashing services, prepaid cards and payday loans, and it is expanding those services; last week, a senior executive announced plans to offer prepaid cardholders savings accounts with matching fund contributions and check-imaging technology for faster deposits. As Regions actively courts the long-ignored underbanked population, it has faced both praise and criticism. Wells Fargo (WFC) and a handful of other banks also offer such products, and Regions’ new “Now Banking” services are pretty familiar to anyone who has ever walked into a Western Union (WU) or a payday lender office. . .”