U.S. Bank says it will offer nearly instant small loans to its customers, becoming the first bank to provide such a product since federal regulators cleared the way earlier this year amid continuing concerns over the costs of payday loans.
Graciela Aponte-Diaz of the nonprofit Center for Responsible Lending said she’s particularly concerned about U.S. Bank customers who take out larger loans under the new program because borrowers only have three months to repay.
“It’s dangerous for a loan of $500 or $1,000,” she said. “Three months is not very long to come up with that much money.”