My church, First Congregational, has been banking with U.S. Bank for decades. We have also been at the forefront of protecting Montanans from predatory loan products, like payday and car-title loans. In Montana, we won, through a citizen vote, an interest rate cap at 36 percent for payday loans in 2010. Since then, Montanans save an estimated $37 million annually.
It has come to my attention that U.S. Bank has started offering small dollar bank loans that look awfully similar to payday loans. People are often strapped enough for cash that they need help paying for car maintenance and hospital bills, but this new bank loan comes with an extraordinarily high interest rate of up to 88 percent, well above our state interest rate cap. States cannot regulate a federally insured bank’s interest rates, and thus U.S. Bank feels like they can abuse Montana families. The Office of the Comptroller of the Currency (OCC), which regulates U.S. Bank, says that banks should “treat customers fairly” and points out that products should “support borrower affordability and successful repayment.”
I don’t know about you, but 88 percent interest doesn’t seem “fair” to me. I hope the OCC looks into U.S. Bank. Banks should not get a free pass to charge Montanans high interest rates on loans when we won protections from similar payday loan products. Montanans agree 36 percent interest is fair to both the consumer and the lender.
U.S. Bank should stop stealing from our friends and families, and stick to products that are fair for Montanans.