Good news for consumers: This morning Regions Bank announced it is discontinuing its payday loan product—loans with triple-digit interest rates. Data have consistently shown that payday loans made by banks, like those made by payday stores, lead to a cycle of repeat loans, making a borrower's financial situation worse instead of better.
Regions Bank is one of a handful of depository institutions that in recent years has veered into payday lending. In recent months, both federal and state regulators have increased scrutiny around all types of payday lending, whether by banks, storefronts or online. Guidance from the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) is addressing payday loans made by the institutions under their supervision. Regions is regulated by the Federal Reserve, but appears to be responding to broader market and regulatory trends.
We urge Fifth Third Bank, which also is regulated by the Federal Reserve, to follow suit and discontinue its payday loan product as well.
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For more information, contact David Beck at (919) 956-4495 or david.beck@self-help.org