facebook
twitter
rss
account
search
search
 

U.S. Bank, Wells Fargo to end payday loan alternatives

Jan. 17, 2014 at 2:45 PM   |   Comments

MINNEAPOLIS, Jan. 17 (UPI) -- U.S. Bank and Wells Fargo said Friday they no longer would offer their alternatives to payday loans to comply with regulatory guidelines.

U.S. Bank, based in Minneapolis, said it would wind down its short-term deposit advance product, "Checking Account Advance," to align with the final regulatory guidance issued by the Office of Comptroller of the Currency and the Federal Deposit Insurance Corporation.

"We recognize our customers' need for short-term, small-dollar credit," said Kent Stone, vice chairman of consumer banking sales and support at U.S. Bank. "We are committed to finding new solutions that meet the needs of all of our customers and fit within the current regulatory expectations."

U.S. Bank said it wouldn't offer Checking Account Advance to new checking account customers on Jan. 31 and it would be discontinued for current customers on May 30. The financial institution said customers with outstanding balances would be offered extended repayment terms.

Wells Fargo, based in San Francisco, said new checking account customers won't be eligible for its "Direct Deposit Advance" product beginning Feb. 1. The national bank said there were no immediate changes for existing Direct Deposit Advance customers, who can access the service until mid-year.

In November, federal regulators issued guidelines for banks that provide the payday loan alternatives, saying lenders must assess a borrower's ability to repay.

Based on assets, Wells Fargo is the fourth largest bank in the United States and U.S. Bank is the fifth.

Topics: Wells Fargo
© 2014 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
Recommended UPI Stories
Featured UPI Collection
trending
Celebrity Couples of 2014 [PHOTOS]

Celebrity Couples of 2014 [PHOTOS]

Most Popular
1
U.S. Air Force orders more RQ-4 Global Hawks U.S. Air Force orders more RQ-4 Global Hawks
2
Talon rocket in full-rate production for UAE Talon rocket in full-rate production for UAE
3
Hotel chain suspending sponsorship of Minnesota Vikings Hotel chain suspending sponsorship of Minnesota Vikings
4
EU, Kiev, Moscow gas talks suspended EU, Kiev, Moscow gas talks suspended
5
Students hurt in high school lab fire Students hurt in high school lab fire
Trending News
Video
x
Feedback