U.S. Banks Pushing Into Small Loans Compete With Payday Shops
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Banks facing lower revenue from debit-card and overdraft fees are ramping up marketing of small short-term loans, prompting regulators to question if they carry the same risks to borrowers as other forms of payday lending.
The high-cost loans offered by firms including Wells Fargo & Co. and U.S. Bancorp are meant for people who can’t access other forms of bank credit, similar to the clients of storefront or online payday lenders.