The affiliation of payday loan providers with nationwide banking institutions could be the industry’s choice of preference, but federal bank regulators are actively discouraging the training.

Banking institutions had been especially warned about participating in payday financing through 3rd events in a Nov. 27, 2000, advisory page from Julie L. Williams, very first senior deputy comptroller and main counsel associated with U.S. Treasury Department’s workplace associated with Comptroller of Currency.

“Although the OCC encourages banking institutions to react to customers’ short-term credit needs, payday financing can pose many different security and soundness, conformity, customer security, along with other dangers to banking institutions,” the advisory letter stated. “Payday loan providers stepping into such plans with nationwide banking institutions should not assume that the advantages of a bank charter, specially according to the application of state and neighborhood legislation, could be accessible to them. Continue reading “The affiliation of payday loan providers with nationwide banking institutions could be the industry’s choice of preference, but federal bank regulators are actively discouraging the training.”