Report rips banks on 'payday' loans

  • Article by: JENNIFER BJORHUS , Star Tribune
  • Updated: April 17, 2012 - 9:44 AM

A Minnesota group claims four banks, including Wells Fargo and U.S. Bank, charge as much as 365 percent interest on such loans.

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localguyApr. 17, 12 5:11 AM

This is another appalling example of why we have an income gap in the United States that is equivalent to third world countries. In this case, the 1% are sticking it to the working poor. Capitalism is a powerful force, but it needs to be tightly regulated or we'll continue to slip back into the Middle Ages.

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marcymmbApr. 17, 12 7:01 AM

This is BS, payday loans are a choice, if you want one you sign an agreement you get the money and you repay it.

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raineyrooApr. 17, 12 7:22 AM

marcymmb - true, payday loans are a choice. It's pretty obvious that desparation clouds individual's thinking. Banks like Wells Fargo know what percentage of indiviuals will default. Those that do, have the costs passed onto all the other Well's customers in the forms of higher fees (monthly debit & account maintenance fees for starters). Real classy.

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scenic61Apr. 17, 12 8:13 AM

Ok...someone please name a payday loan company out there (big company or small fry) that DOES NOT charge a high fee/rate for this kind of service? Come on Strib...where is the objectivity in this article?

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konjokrisApr. 17, 12 8:47 AM

I was desperate at one time, or I thought I was. I did a title loan on my Accord, for thirty days the loan was active I was stressed at how I was going to pay it back. My ex boyfriend ended up coming up with the money (don't ask me how). I vowed to never ever put myself in that situation again. After many, many years of making bad financial decisions I finally got rid of my credit cards and refuse to take out another loan. The "pay day" loan business is another tool to prey on poor people and to make money off the backs of the poor. When you are a person on a fixed income, or the working poor this struggle is very real. It's a choice to pay rent, buy food or pay for your needed medicine. Rent is the winner most times. The banks should not be allowed to charge 350% off a pay day loan. It's wrong and it's robbery, only legal. I don't care if the person has a choice to do it or not, find yourself between a rock and a hard place and see what you would do to put food on the table. Not everyone can get food support from the county, not everyone can get medical assistance. Desperate times call for desperate measures.

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jpreiteApr. 17, 1210:35 AM

Yes, those evil banks, offering a service and making a profit. So here's the solution -- magic! Banks will charge less and still offer the service, even though they won't make a profit. I have a better idea. If you don't think people should be making payday loans, outlaw them. Because that's what the net effect of regulation will be. It's the same as ATMs. To have a machine in convenient places requires enough fee income to pay for the property, the construction, the operation, the cash supply and the security. Don't want ATM fees? Fine. We'll get rid of ATMs. While were at it, an argument could be made that we would never have had the housing crisis without home equity loans, so lets get rid of those too. Or continue to borrow your way to financial ruin and blame the banks for the result.

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konjokrisApr. 17, 1211:21 AM

ATM fees are out of control. U.S. Bank charges $3.50 for me to take mmy money out of their machine and the ATM is outside of their bank, so I'm not buying the overhead crap. What about the person who is an independant ATM owner. The banks and the private owners are gouging the consumer with fees, it's a legal form of robbery. I undserstand fees, but come on it doesn't need to be so out of control. Don't fool yourself in to thinking poor banks just want to do business and pay their overhead, I'm not buying it. They are making a huge profit and it's not necessary. Yes I agree to charge a fee, but come on.

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stolaf80Apr. 17, 1212:13 PM

"Vulnerable"?, come on they're adults. These people are free to not get the loans. Why are we plagued with so many people who want to decide what others should and can do? All you folks who think the fee is too high need to start a bank and compete in the real world. The person whining about ATM fees should go figure out what it costs to put in an ATM, with it's phone line, real estate, insurance, maintenance, and power needs. If the banking service market is so blasted overpriced there should be plenty of room for you and your like minded friends to get competing financial service entities started.

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rolsen40Apr. 17, 1212:14 PM

jpreite - you're exactly right. Konjokris - US Bank does not charge atm fees when using their ATMs, you must have used a different ATM, please remove your comment as it misinforms everyone and creates more of this non-sense. Blaming everything on banks is getting really old and tired, especially when people try to tie to income gap... huh? The 1% localguy? You watch too much MSNBC, and no don't watch fox either - research the facts and inform yourself

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stolaf80Apr. 17, 1212:29 PM

The "Minnesotans for a Fair Economy" are part of the war on the 1% bunch. Just check out their website. If it was the Heritage Foundation, Cato Institute, or Koch Foundation it would have been identified as a conservative organization. Since it's left wing liberal the Star Tribune feels it's mainstream and of course what everyone thinks and so doesn't need to be labeled.

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