Democratic Sens. Richard Blumenthal (Conn.), Sherrod Brown (Ohio), Dick Durbin (Ill.), Chuck Schumer (N.Y.), and Tom Udall (N.M.) are calling on banks to stop issuing payday loans, CongressDaily reported today. The lawmakers said that banks are essentially offering high-cost payday-loan offers similar to nonbank lenders and then collecting automatic fees on consumers that can elicit overdraft charges. The senators are urging federal regulators to crack down on the practice. “Bank payday loans increase the ranks of the unbanked by making checking accounts unsafe for vulnerable consumers, a result clearly inconsistent with a safe and sound banking system,” the lawmakers wrote in a recent letter to federal regulators.
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