Bank Rolls Out Payday Lender-Like Product
Austin Bank of Chicago is rolling out a program that will sound familiar to credit unions. Saying it was struck by the number of customers asking the bank for loans of less than $500 whom it turned down and who then left the bank and got the loan from a payday lender, Austin Bank is introducing a loan product in response. In its case, the $227-million bank will offer a product that works like a credit line. Applicants can apply for three-year loans of $1,000 to $10,000. If approved, they are given checks to draw down on the line. Monthly payments are 3% of the principal and accrued interest until the balance is paid.