U.S. Bank recently introduced a brand new small-dollar loan item. By the bank’s own description, it is a high-cost product, at 70-88% APR.
High-cost loans by banks give you a mirage of respectability. An element with this impression could be the idea that is misguided restricting payment size to 5% of revenues means the mortgage is affordable for many borrowers. However these items will undoubtedly be unaffordable for a lot of borrowers and finally erode defenses from predatory financing throughout the board.
Many years ago, a few banking institutions had been making interest that is triple-digit, unaffordable payday advances that drained consumers of half a billion dollars per year. Continue reading “BankThink High-cost loans one step when you look at the direction that is wrong”