Green America: Growing the Green Economy for People and the Planet

Tell the Mega-Banks: No More Triple-Digit-Interest “Payday” Loans!

What’s a fair amount of interest to pay on a loan?

Think of your answer, and then ask yourself another question: Could you do business with a bank that you know is charging some customers as much as 365 percent interest on a loan?

That’s exactly what is happening at some corporate mega-banks offering new loan products with names like “Checking Account Advance” or “Direct Deposit Advance.” These products offer a customer an “advance” on the next direct deposit into their checking account, which is then deducted automatically by the bank – at a hugely inflated interest rate – upon their customer’s direct deposit. These are nothing more than payday lending schemes by other names. They carry very little risk for the lending bank (which has control over the direct deposit) while keeping low-income borrowers in an endless cycle of debt and borrowing.

Can you take a moment to send a message to four mega-banks offering payday products, and tell them you don’t approve of their unfair practices?

Please sign on to our letter below, and visit to find a community development bank or credit union with a commitment to treating borrowers fairly.

Dear Fifth Third, Regions Bank, US Bank, & Wells Fargo,

As our country begins to recover from the economic crisis triggered by bad lending, millions of Americans continue to struggle financially. Banks like yours have the ability to either aid economic recovery or profit from households’ misfortune.

Unfortunately, today, your institution is one of a handful of banks have chosen the latter by offering payday loans to your customers. The average interest rate for these payday loans, also known as “direct deposit advances,” offered by Wells Fargo, U.S. Bank, Fifth Third Bank, and Regions Bank is 365 percent APR.

We deserve better than 365 percent.

Many states prohibit triple-digit interest payday products—and for a good reason. Whether made by a bank or payday loan store, payday loans carry high fees with a very quick due date – a borrower’s next payday. The lender gets repaid by automatically accessing the borrower’s bank account. The problem is this: If a borrower is living paycheck-to-paycheck, they aren’t likely to both repay that advance, plus the high fees, in one or two weeks, and meet the all their other expenses without having to re-borrow again and again. This is the predatory debt trap which no bank ought to be causing, particularly for its own customers.

I urge you to do the right thing for consumers and the health of our economy. Commit to treat us with dignity and fairness by ending your practice of making payday loans now and forever.

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