U.S. Bank recently introduced an innovative new loan product that is small-dollar. Because of the bank’s description that is own it is a high-cost item, at 70-88% APR.
High-cost loans by banking institutions give you a mirage of respectability. An element of the impression may be the idea that is misguided restricting payment size to 5% of revenues means the mortgage is affordable for many borrowers. However these items would be unaffordable for all borrowers and eventually erode defenses from predatory lending throughout the board.
A couple of years ago, a few banking institutions had been making triple-digit rate of interest, unaffordable pay day loans that drained consumers of half a billion bucks a year. (more…)