This follwoing report from National individuals Action traces connections involving the payday lenders that are largest and Wall Street banking institutions, including financing arrangements, leadership ties, assets, and shared techniques. Listed here are a number of the report’s key findings:

Pay day loan businesses depend greatly on funding from big banking institutions, payday loans in South Carolina no credit check including

Wells Fargo, Bank of America, and JPMorgan.

* Big banks provide $1.5 billion in credit to publicly held pay day loan businesses,

as well as a believed $2.5-3 billion into the industry in general.

* Wells Fargo funds more payday loan providers than just about any bank that is big six regarding the

eight largest lenders that are payday. Bank of America, JPMorgan Chase, and United States Bank

additionally fund the operations of major payday lenders. Bank of America and Wells

Fargo offered critical early funding towards the payday lender that is largest, Advance

America, fueling the rise associated with the industry.

* Publicly traded payday loan providers paid nearly $70 million in interest cost on

debt in ’09 – a sign of just how banks that are much profiting by extending credit to

* Some banks usually do not provide to payday loan providers because of risks that are“reputational”

linked to the industry.

Numerous payday organizations have actually strong ties to Wall Street.

* Two Bear Stearns executives guided the increase of payday lender Dollar Financial,

as well as 2 Goldman Sachs professionals sat in the company’s board when it went

* Advance America’s professionals and board users have ties to Bank of

America, Morgan Stanley, and Credit Suisse.

* Bank of America as well as its subsidiaries very very very own significant stakes (significantly more than 1%) in

four associated with top five publicly held lenders that are payday Advance America, EZCORP,

Money America, and Dollar Financial.

Payday financiers are major bailout recipients, and proceeded to increase credit to

payday lenders through the entire economic crisis and following a bailouts.

* Big banks financing major payday lenders received $105 billion in TARP funds in

belated 2008. Bank of America received $45 billion, and Wells Fargo and JPMorgan

gotten $25 billion each. Big banking institutions proceeded to negotiate and amend credit

agreements with payday lenders through the crisis that is financial following the

* Two payday loan providers, EZCorp and money America, utilized loans negotiated with JP

Morgan and Wells Fargo and soon after the bailouts to get pawn store chains

in Las Vegas, Nevada and Mexico.

Big bank funding of payday lending generated the increase of the effective industry lobby

which has effectively battled efforts to cap interest levels.

* several lenders that are payday dominating the industry into the belated nineties in the

strength of bank funding. These loan providers formed a lobbying that is powerful, the

Community Financial Services Association, which includes invested $11.3 million on

federal lobbying efforts since its inception in 1999.

* Major payday lobbyists also lobby for monetary organizations such as for example Morgan

Stanley, Fitch Reviews, Visa, Blackstone Group, the funds that are managed

Association, and also the Personal Equity Council. One lobbyist, Wright Andrews, was

formerly an important lobbyist for the subprime mortgage industry.

A nationwide rate of interest limit of 36% would effortlessly place payday loan providers away from

business, relating to Advance America’s disclosure filings, but this type of limit

didn’t gain traction throughout the economic reform procedure as a result of the clout associated with

financial industry’s lobby.

You can find indications that the lending that is payday will expand in the foreseeable future.

• Big banks such as for instance Wells Fargo, US Bank, and Fifth Third are now actually providing brand brand new

payday loan-style items. Called “checking advance” items, these shortterm

loans carry interest levels as high as 120percent.

• Some Wall Street analysts genuinely believe that the industry will develop last year as

financially-stretched borrowers have increasing difficulty credit that is securing.

The industry can also be predicted to keep expanding into pawn financing and

other solutions, such as prepaid debit cards.

• Bank of America and Goldman Sachs are leading an IPO for prepaid

debit card issuer NetSpend, which lovers with numerous payday loan providers and is