Summary
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Payday lending involves short-term loans that are usually repaid within one or two weeks, often with a post-dated check that is deposited after the borrower receives his or her paycheck
A
number of national banks essentially rented out their charters to third
party payday lenders
- The OCC found that a number of banks were unable to properly oversee the third party lenders who were making
loans in their names, particularly smaller banks
Among
the practices found by the OCC were
- Deceptive marketing practices
- Failure to properly secure confidential customer
files
- Unsafe and unsound lending
Interagency
statement urging banks and thrifts to evaluate the risks with vendors engaged in
practices viewed as abusive to consumers
FDIC
guidance for bank examiners on Payday Lending
Legislation
recently introduced in the House of Representatives (H.R.
2871) which amends the Truth in Lending Act to prohibit payday lending by
insured depository institutions and to prohibit it entirely if based upon a
check drawn upon a depository institution 6.26.07
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Armed
Forces Members and Dependents
Enforcement Actions
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Peoples
National Bank
First
National Bank in Brookings
SEC_CODE_REF_0090001192884
Goleta
National Bank & ACE Cash Express
People's
National Bank of Paris, TX
Eagle
National Bank of Upper Darby, PA
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Commentary on Payday Lending
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