Target: Banks aiding in payday loans, including JPMorgan Chase, Wells Fargo, and Bank of America
Goal: Urge banks to stop facilitating payday loans
Major banks have recently become an ally to internet-based payday loaners who, with rates that can sometimes exceed 500%, are a major cause of debt for strapped consumers in need of some quick cash. Although these banks do not handle the loans directly, they are responsible for allowing these loaners to widthdraw from their customers’ accounts—often doing so in states where there is a cap on interest rates for loans. By helping these loan sharks continue these unfair practices, these major banks are contributing to the kind of predatory behavior that caused our recent financial crisis. They must discontinue this policy.
Due to regulation stemming out of this financial crisis, 15 states have banned payday loans, leading to many of these businesses setting up online operations in other states or overseas so they can avoid regulation. These loans, while easy to obtain, can be tough to get rid of. Some lenders require at least three days notice before the next withdrawal, otherwise the lender automatically takes out the interest owed. Banks are required by law to stop authorized withdrawals at the consumer’s request, but this has been reported by customers to not be the case.
At first glance it would seem the banks have nothing to gain from these loans. But, with regulations clamping down on fees banks can charge customers, the withdrawal fees that often hit customers after they take these payday loans are a wanted source of revenue. The banks have lost millions in fees thanks to new regulation, and this is a way that they can get some of the lost money back.
These loans with deceiving rates can have disastrous effects on someone’s finances, especially those already struggling with money (as is the case with most people who take these payday loans). Some states are already doing their part to stop these predatory loaners from taking advantage of customers, and now it is time for the banks to do the same. By signing this petition you are urging major banks to stop these unfair and harmful practices.
Dear JPMorgan Chase, Wells Fargo, and Bank of America,
Your practices of aiding payday loaners have gone too far. These loans, sometimes exceeding rates of 500%, are unfair and damaging to our economy as a whole. I am writing you this letter today to urge you to stop allowing these loan sharks to withdraw from your customers’ accounts when their states have outlawed loans such as these.
Payday loans take advantage of consumers strapped for cash and push them even further into debt. By helping these loaners avoid regulations in states they are outlawed in, you are contributing to practices that are a big reason our nation fell into this financial crisis to begin with. Please revise this policy. Thank you.
[Your Name Here]
Photo credit: Jason Comely via Flickr