Advance America to Close Payday Loan Offices
Due to a federal banking investigation, Advance America may be forced to alter its payday loan practices in Arkansas and Pennsylvania.
Company president Ken Compton said in a conference call last week with reporters and analysts that the Federal Deposit Insurance Corporation is looking at payday advance operations at banks it supervises.
Advance America and other similar lenders originate short-term, high-interest loans financed by regular banks. The companies also earn fees for collecting payments and dealing with late payers. Because the FDIC insures bank deposits, agency officials have said they think the business is too risky for their banks. The quick cash loan issue probably won't go away any time soon.