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Released: March 21, 2013

Big banks engaging in payday lending

Source: Danielle Douglas, Washington Post

Some of the nation’s largest banks are providing short-term loans with interest rates of up to 300 percent, driving borrowers into a cycle of debt, according to a new report from the Center for Responsible Lending. The study, due out Thursday, gives an updated look at the perils of advance-deposit loans offered by Wells Fargo, U.S. Bancorp, Regions Bank, Fifth Third Bank, Guaranty Bank and Bank of Oklahoma.

Banks market these products, carrying such names as “Early Access” or “Ready Advance,” as short-term solutions for emergencies. But the average borrower took out at least 13 loans in 2011 and spent much of the year saddled with the debt, according to the study by the center, an advocacy group. Researchers looked at a sample of 66 direct deposit advances over a 12-month period.

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