“Banks can be profitable at a price-point six to eight times lower than average payday loan pricing,” he said. For example, a payday borrower accumulates $350 in fees on a $400 loan in just over three months. At USBank, under its new “Simple Loan” product launched in September, a similar loan offered to a similar customer goes for just $48.
“It’s a really good thing that some of the banks are getting into small-dollar lending,” said Kaplinsky, the industry lawyer. “That will create more competition and ultimately help interest rates come down for consumers.”
This article provided by Bloomberg News.