Community groups are uniting to protest Regions Financial's (RF) short-term loan program, calling on the Birmingham, Ala., company to ditch its "Ready Advance" product.
Demonstrations against the Ready Advance product are set to take place Wednesday in Regions offices in Decatur, Ill., Urbandale, Iowa, and Columbia, Mo., according to a press release from grassroots organization network National People's Action. The group said it had collected 12,000 signatures urging Regions to drop the product, which it likens to payday loans.
"We deserve better than to be swindled at our neighborhood bank," Cherie Mortice, Iowa Citizens for Community Improvement Board member, said in the release. "It's time for regulators to step in and ban these loans, and in the meantime we demand that Regions CEO Grayson Hall pull them off the market."
The group also directed its ire at the Federal Reserve, Regions' primary national regulator, for failing to join other regulators in imposing restrictions on banks' deposit advance loans. Earlier this year, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp. issued guidance on deposit advance loans that requires lenders to verify borrowers' ability to repay the loans before dispersing them. In response to lawmakers' calls for even stronger measures, the FDIC said in July that it would consider additional restrictions
Regions' Ready Advance product charges a $1 cash advance fee for each $10 advanced to customers. Borrowers who take out advance loans can wind up paying an annual percentage rate of 120% or more, according to the company's disclosure.
A Regions spokeswoman declined to comment on the release from National People's Action or their plans.