The New York Times has had some interesting stuff lately about payday loans and how many of the bigger banks are complicit in aiding payday lenders in those predatory practices.
From last week…
While the banks, which include giants like JPMorgan Chase, Bank of America and Wells Fargo, do not make the loans, they are a critical link for the lenders, enabling the lenders to withdraw payments automatically from borrowers’ bank accounts, even in states where the loans are banned entirely. In some cases, the banks allow lenders to tap checking accounts even after the customers have begged them to stop the withdrawals.
This week, Jamie Dimon of JPMorgan Chase vowed to do something about it.
The Times also blogged about why, exactly, people use payday loans in the first place. In a nutshell, it’s desperation.