See that garish neon sign down at the local strip mall that says “Payday loans!”
If you’re ever short of cash and think a “payday loan” or “payday advance” sounds like a reasonable idea, there are two things you should know before you walk in the door. (1) The money for your payday rip-off is provided by the same big banks you bailed out with your tax dollars, and (2) The interest rate payday loan lenders charge is so high it would make a loan shark like Tony Soprano blush.
In fact, according to a report by WFAE, the payday loan industry wouldn’t exist if it weren’t for Wells Fargo and Bank of America:
“These banks were bailed out by the American taxpayer and they need to stop investing in an industry that thrives off bilking the American taxpayer,” says George Goehl, executive director of National People’s Action, a community advocacy group that co-sponsored the report. It estimates big banks extend as much as $3 billion in credit to payday lenders each year.
Wells Fargo is the largest funder with a lead role in financing six of the nation’s largest payday lenders. According to the report, Bank of America and its subsidiaries own more than a one-percent stake four of the top five publicly-held payday lenders. Neither bank disputes the report, but both say they put payday lenders through a strict screening process to qualify for funding…
Continue reading “The payday lender rip-off: Who gives them the money they give you?”
