Activists Warning Consumers About New Bank Loan Product
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.