The Predators' Creditors
A new report by National People's Action, The Predators' Creditors, reveals that amidst record high unemployment, foreclosures, and budget deficits, Wall Street's biggest banks are now helping the bottom feeders in the loan industry: Payday Lenders.
Big banks--the same banks who received TARP funds to bail them out--are extending billions of dollars in credit to payday loan companies that feed on the economic misery of urban and rural low income working families, with usuriously high interest rates at an average 455%.
Wells Fargo is the biggest single enabler of payday lenders, the report finds, followed by Bank of America, JPMorgan Chase, US Bank, Banco Popular and Wachovia. Wells Fargo finances about one-third of this predatory industry based on SEC and other government filings from public companies only.
Bank of America and Wells Fargo, specifically, played a crucial role in the rise of the largest payday lender, Advance America, which operates more than two times as many storefronts as its next closest competitor. Bank of America Wells Fargo and Wachovia provided $40-50 million in credit to Advance America before the company operated a single store. Both banks continue to finance Advance America.
Download a breakdown of big bank financing in 10 states (PDF)
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