U.S. Bank recently introduced a unique small-dollar loan item. Because of the bankвЂ™s own description, it is a high-cost product .
High-cost loans by banking institutions provide a mirage of respectability. An element with this impression could be the misguided indisputable fact that restricting payment size to 5% of gross income means the mortgage is affordable for some borrowers. However these services and products is likely to be unaffordable for a lot of borrowers and erode protections from ultimately predatory financing throughout the board.
Many years ago, a few banking institutions had been making interest that is triple-digit, unaffordable pay day loans that drained consumers of half a billion bucks per year. A widow who relied on Social Security for her income among their many victims was Annette Smith.