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Activists Warning Consumers About New Bank Loan Product

By Anthony Silva, WBZ NewsRadio 1030
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(credit: AP)

(credit: AP)

420x316-grad-silva Anthony Silva
Anthony Silva is co-host of the WBZ Afternoon News heard each wee...
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BOSTON (CBS) – As most banks look for new sources of revenue, some are turning to a controversial new product: high-interest, ultra-short-term, payday loans.

But the banks call them something different.

Wells Fargo and US Bank have begun offering loans that customers draw against their paychecks.

But fees are sky high. For a $100, two-week loan, a customer would pay $16.

Edgar Dworsky of consumerworld.org tells WBZ these new products are sprouting as banks’ profits are crimped.

Dworsky says most of these payday loans carry triple digit annual interest rates.

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