Payday banks

  • Updated: September 9, 2009 - 9:09 AM

PAYDAY BANKS

Three major banks now offer payday loan-type products to their checking account customers. Here is a brief description of each product:

U.S. BANK

Called: Checking Account Advance

Introduced: March 2006

Credit limit: $500 or half of a borrower's total monthly direct deposits, whichever is lower.

Fees: $2 for every $20 advanced.

Requirements: Must be a U.S. Bank checking account customer for at least six months with direct deposit and have regular monthly direct deposits of $100 or more.

Limits: Borrowers who receive nine consecutive monthly loans are ineligible for 90 days.

Wells Fargo

Called: Direct Deposit Advance

Introduced: 1994

Credit limit: $500 or half of a borrower's total monthly direct deposits rounded to the nearest $100, whichever is lower.

Fees: $2 per $20 advanced.

Eligibility requirements: Must have a Wells Fargo checking account and have a recurring electronic deposit of $100 or more.

Limits: Bank will reduce the credit limit by $100 if borrowers receive the loans for more than 12 consecutive months.

Fifth Third

Called: Early Access

Introduced: September 2008

Credit limit: $500 or half of borrower's monthly direct deposits based on a three-month average, whichever is lower.

Fees: $2 per $20 loaned.

Eligibility requirements: Must have a Fifth Third checking account that has been open for at least six months.

Limits: Borrowers who receive six consecutive monthly loans are ineligible for 30 days.

Source: U.S. Bank, Wells Fargo, Fifth Third

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