Like storefront payday advances, deposit advance had been marketed as an intermittent connection to a consumerвЂ™s next payday. But additionally like storefront pay day loans, these bank items caught borrowers in long-term, debilitating debt.
But banking institutions destroyed desire for deposit advance as a result of 2013 guidance that is regulatory banking institutions to assess borrowersвЂ™ ability to repay their loans centered on earnings and costs. Now, amid a tempest of deregulation in Washington, the banking industry is pushing regulators to allow them back in the payday lending game. They should be aware of better.
The American Bankers Association called on the Federal Deposit Insurance Corp. and Office of the Comptroller of the Currency to back off their 2013 guidance, the FDIC to withdraw different guidance dealing with overdraft protection and the Consumer Financial Protection Bureau to withdraw its proposed rule on small-dollar lending in a recent policy document. Continue reading High-cost installment loans: No improvement over pay day loans