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The affiliation of payday loan providers with nationwide banking institutions will be the industry’s choice of preference, but bank that is federal are earnestly discouraging the training.

07Feb

The affiliation of payday loan providers with nationwide banking institutions will be the industry’s choice of preference, but bank that is federal are earnestly discouraging the training.

Banking institutions had been especially warned about participating in payday financing through 3rd parties in a Nov. 27, 2000, advisory page from Julie L. Williams, very first senior deputy comptroller and primary counsel regarding the U.S. Treasury Department’s Office of this Comptroller of Currency.

“Although the OCC encourages banking institutions to answer clients’ short-term credit requirements, payday financing can pose a number of security and soundness, conformity, customer security, as well as other dangers to banking institutions,” the advisory page stated. “Payday loan providers stepping into such plans with nationwide banking institutions must not assume that some great benefits of a bank charter, especially according to the application of state and law that is local could be open to them.

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