Republic Bank and Trust Co. Ceases Its Payday Loan, Payday Advance Practices
By J.J. CameronPayday Loan Writer
The Federal Deposit Insurance Corp. is at it again. The organization has pressured Republic Bank & Trust Co. to get out of the business of payday loans and cash advances.
As a result, the bank is ending its partnership with ACE Cash Express, a company that offers Republic’s payday loans in Texas, Arkansas and Pennsylvania.
The Louisville-based banking company said it received a letter from the FDIC encouraging it to end the payday lending business because of financial risks. In several states, people can take out high-interest, short-term loans and repay them when they get their paychecks.
Consumer advocates have criticized the payday loans, however, saying the high fees and interest rates keep low-income people in a constant state of debt.
Overall, cash loans earned $2.27 million for Republic in the three-month period that ended Sept. 30, about 28 percent of its net income. That percentage dropped in the final three months of the year after Republic ended its relationship with Advance America.
March 12th, 2006 at 1:52 pm
[…] They said it would shield banks from Kentucky laws regulating usury and payday loans and from the High Cost Loan Act of 2003, meant to protect consumers against predatory home loans. […]