Those evil Federal Regulators are on our backs again.
You would think the Federal Deposit Insurance Commission (FDIC) wanting to shut down a major portion of Kentucky's largest independent bank would be big news. Their 150% interest rates put payday lenders and loan sharks to shame.
However, they are one of the largest print advertisers in the State and are known to pull ad buys if a bad story about them airs. Known as one of the worst consumer banks, they did payday lending on military bases until they were shut down.
From the Courier Journal:
Republic Bank & Trust of Louisville claims federal regulators are overstepping their authority in an attempt to stop the bank from making loans that would be repaid from tax refunds.
Republic wants a judge to stop the Federal Deposit Insurance Corp. from trying to end the loans, called Refund Anticipation Loans or RAL, because the law doesn't give regulators the power to do so…….
In a report issued Monday, The National Consumer Law Group, which opposes the use of such loans, said Republic Bank charges a customer $61.22 for a RAL of $1,500. That rate amounts to an annual interest rate of 149 percent, the group said.
Maybe we need to make Kentucky a loan shark sanctuary state.
1 comment:
No Sale.
They're assuming a ten day loan period, and anytime you take an interest rate - by definition an annual rate - and shorten it drastically, you're going to get an outrageous number. If you assume a year period, instead of a ten day peiod, the rate is more like 4%.
Frankly, $61 is less than a lot of those pop up tax services would charge for that same service, and in today's world, their overhead probably won't let them go thru the approval, distribution, accounting and payoff function for much less than $61.
I seriously don't want to be a defender of a large bank - the horror! - but these folks are manipulating numbers.
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