✅Wells Fargo and Bank of America have been financing payday loan businesses for years in Dallas, Texas, as the investigation team at WFAA.com uncovers.
You have the big banks like Wells Fargo, Bank of America, and others that need certain criteria met in order to provide personal loans. Unfortunately, there are a group of people who do not fit their criteria as a borrower to receive the loans. This group of people still needs loans. So what happens?
An entire industry is created to help provide loans to these borrowers. They’re higher risk so it’s only fair that the interest they pay is higher to offset the risk. But how much interest is fair and how much becomes absolutely predatory? I discuss this question in today’s video.
The big banks run our country. They control our entire economy here in the United States. Really think about what runs our economy. It’s the ability to borrow. Without the ability to borrow, our economy collapses. 2008 being a great example.
It shouldn’t be surprising then that the communities that are low income, low business growth, and higher risk borrowers are the areas that banks don’t lend to. It’s the chicken or the egg problem. What came first? Bad borrowers or banks creating a system that sparked the payday lenders?
One of the most impactful elements of America’s history was the practice of redlining. What’s fascinating to me is how I wasn’t taught this in school, but as I’ve gotten older, it’s become obvious that this still has a profound impact on society in America today. And I’d argue a central element to really understanding socio-economic elements of society.
Quotes from the video:
“With over two times as many payday loan stores than there are casinos, you’ll find a payday loan storefront at almost every major intersection in Las Vegas. The payday loan industry in Nevada is about a half a billion dollars a year.”
“According to the Center for Responsible Lending, Nevada has “no meaningful regulation of payday lending.” There is no cap on how much interest lenders can charge. Among the highest in the country, the average interest rate in Nevada is a whopping 652% (the national average is around 400%).”
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