High-cost installment loans: No improvement over pay day loans

High-cost installment loans: No improvement over pay day loans

Until 2013, a few banking institutions had been siphoning vast amounts yearly from consumer records through “direct deposit advance” — items that carried normal annualized rates of interest as high as 300%. Like storefront payday advances, deposit advance ended up being marketed as an intermittent connection up to a consumer’s payday that is next. But additionally like storefront payday advances, these bank services and products caught borrowers in long-term, debilitating financial obligation.

But banking institutions destroyed fascination with deposit advance as a result of 2013 regulatory guidance instructing banking institutions to evaluate borrowers’ ability to settle their loans centered on earnings and costs. Now, amid a tempest of deregulation in Washington, the banking industry is pressing regulators to allow them back in the payday lending game. Continue reading “High-cost installment loans: No improvement over pay day loans”