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Sun Feb 24, 2013, 08:00 AM

Major Banks Aid in Payday Loans Banned by States By JESSICA SILVER-GREENBERG

Source: The New York Times

Major Banks Aid in Payday Loans Banned by States
By JESSICA SILVER-GREENBERG
Published: February 23, 2013

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. In some cases, the banks allow lenders to tap checking accounts even after the customers have begged them to stop the withdrawals.

“Without the assistance of the banks in processing and sending electronic funds, these lenders simply couldn’t operate,” said Josh Zinner, co-director of the Neighborhood Economic Development Advocacy Project, which works with community groups in New York.

Read more: http://www.nytimes.com/2013/02/24/business/major-banks-aid-in-payday-loans-banned-by-states.html?hp&_r=0

17 replies, 3600 views

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Arrow 17 replies Author Time Post
Reply Major Banks Aid in Payday Loans Banned by States By JESSICA SILVER-GREENBERG (Original post)
TomClash Feb 2013 OP
hobbit709 Feb 2013 #1
Sekhmets Daughter Feb 2013 #2
cstanleytech Feb 2013 #4
siligut Feb 2013 #3
sulphurdunn Feb 2013 #6
pipoman Feb 2013 #5
marmar Feb 2013 #7
BlueCaliDem Feb 2013 #10
starroute Feb 2013 #11
John2 Feb 2013 #8
BumRushDaShow Feb 2013 #9
Angry Dragon Feb 2013 #12
INdemo Feb 2013 #15
tavalon Feb 2013 #17
Heywood J Feb 2013 #13
iandhr Feb 2013 #14
WillyT Feb 2013 #16

Response to TomClash (Original post)

Sun Feb 24, 2013, 08:05 AM

1. when haven't the big banks been behind screwing people out of money?

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Response to hobbit709 (Reply #1)

Sun Feb 24, 2013, 08:06 AM

2. Great question. n/t

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Response to hobbit709 (Reply #1)

Sun Feb 24, 2013, 08:59 AM

4. Answer: Never.

Take the overdraft fees for example, they really mess with people who dont understand them or like my mother who is elderly and now had trouble remembering when she signed a check so last year she overdrafted about 30 to 40 checks which at 35 bucks a pop each caused a number of problems which we only now have managed to resolve.

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Response to TomClash (Original post)

Sun Feb 24, 2013, 08:44 AM

3. Smiling predators in suits

Making money anyway they know how.

People need to be educated about these predatory loan practices, this is the only way to stop it.

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Response to siligut (Reply #3)

Sun Feb 24, 2013, 09:44 AM

6. Smiling reptiles in suits.

No offense intended toward any biological members of the Class Reptilia.

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Response to TomClash (Original post)

Sun Feb 24, 2013, 09:39 AM

5. Legalized loansharking it is..

as with all loansharking it only effects those least able to afford it. Sometimes there should be laws to protect people from themselves..

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Response to TomClash (Original post)

Sun Feb 24, 2013, 09:52 AM

7. The Mob has nothing, I mean nothing, on the Banksters when it comes to organized crime.

nt

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Response to marmar (Reply #7)

Sun Feb 24, 2013, 10:17 AM

10. And this article proves your point unequivocally.

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Response to marmar (Reply #7)

Sun Feb 24, 2013, 10:39 AM

11. Last I knew, organized crime was behind many payday lenders

I wonder if the big banks have forced the little sharks out of the pool -- or if they're in in together.

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Response to TomClash (Original post)

Sun Feb 24, 2013, 09:53 AM

8. It is because

 

the Banks are sharing the profits for over drafts and other fees. If the consumer broke the law, the Banks would freeze their account, but they will honor any transaction if pay day lenders broke laws. They would allow the illegal transactions to continue in order to increase the debt to the consumer. The consumer has no authority over his or her account. These big banks are just monopolies too. They are no different than people that form Unions. That is the problem with privatization. If you get a small group of investors to control everything, then they can theoretically control the entire market by setting agreements. Pay day lenders are the same way. They can make agreements with Banks to screw the consumer. In turn, they all make profits unless the Government steps in to control them or protect the little guy. America's biggest threat is not Socialism but Vulture Capitalists.

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Response to TomClash (Original post)

Sun Feb 24, 2013, 09:55 AM

9. There needs to be federal usury laws. n/t

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Response to TomClash (Original post)

Sun Feb 24, 2013, 11:00 AM

12. These bankers deserve to be in prison

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Response to Angry Dragon (Reply #12)

Sun Feb 24, 2013, 02:29 PM

15. How?..the government has allowed this illegal activity go on...

Example I have a direct deposit that is always on time and even when the 1st falls on a Sat or Sunday my direct deposit is made on the Friday before...Well ....Wells Fargo has gotten in the habit of holding my deposit for at least two days or longer in order to set me up for overdraft charges.....(since direct withdrawals are scheduled a day or two after deposit) I filed a complaint with the FTC and guess how far that went?......yes I am switching to credit union....

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Response to INdemo (Reply #15)

Sun Feb 24, 2013, 06:16 PM

17. We welcome you with open arms.

You will like it on the light side. I used to bank at Wells Fargo and while their online banking user site is much better, their behavior was much worse.

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Response to TomClash (Original post)

Sun Feb 24, 2013, 11:00 AM

13. The solution, thankfully, isn't impossible.

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Response to TomClash (Original post)

Sun Feb 24, 2013, 12:19 PM

14. I AM SHOCKED SHOCKED to find that gambling is going on here.

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Response to TomClash (Original post)

Sun Feb 24, 2013, 02:58 PM

16. K & R !!!


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