In a somewhat surprising move, banks are considering expanding their loan offerings to include payday loans. It is surprising because companies offering this type of loan have been under scrutiny and a lot of criticism for charging exorbitant interest rates for payday and Refund Anticipation Loans (RALs).
Now it seems the local bank may begin offering small loans to consumers with terms that include as much as 120 percent interest rates. The reason they are considering these kinds of loans is because there are new Federal Reserve regulations going into effect on July 1 that limit the amount and number of overdraft fees that can be charged.
The new Federal Reserve rules are expected to cost the banks $15 billion in revenues and that is why they are looking for ways to replace that lost revenue.
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