Until 2013, a few banking institutions were siphoning vast amounts yearly from consumer records through “direct deposit advance” — items that carried typical annualized interest levels of up to 300%. Like storefront payday advances, deposit advance had been marketed as an intermittent connection to a consumer’s payday that is next. But in addition like storefront payday advances, these bank services and products trapped borrowers in long-term, debilitating financial obligation.
But banking institutions destroyed desire for deposit advance compliment of 2013 regulatory guidance instructing finance institutions to evaluate borrowers’ ability to settle their loans predicated on earnings and expenses. Now, amid a tempest of deregulation in Washington, the banking industry is pressing regulators to allow them back to the lending game that is payday. They should be aware of better. Continue reading BankThink High-cost installment loans: No improvement over payday advances