“Banking industry experts are calling it a significant first step in an attempt to find a less-predatory way to provide short-term credit.”
I think this is great. The big problem is the huge credit gap in our capital markets. There is 36% and 391%. I think the banks will learn that operting under 36% without a substantial documentation fee is going to be difficult.
You can read the full artilce in the Washington Post here.
This is the solution, not legislation. Trust me, if you saw the deliquencies that payday lenders have, you would realize that 36% is just not realistic. There has to be a balance.
Comments
2 responses to “FDIC Pilot Program Explores Alternatives to Payday Loans”
The only way banks will be able to offer these loans under 36% APR is with government support (i.e. taxpayer support). If you read the fine print of the FDIC’s comments, you will notice that banks receive CRA credit for funding these loans. That means less taxes for the banks and higher taxes for everyone else.
The only way banks will be able to offer these loans under 36% APR is with government support (i.e. taxpayer support). If you read the fine print of the FDIC’s comments, you will notice that banks receive CRA credit for funding these loans. That means less taxes for the banks and higher taxes for everyone else.