Federal regulators are poised to crack down on payday loans by taking aim the operations of big bank, the New York Times DealBook blog reported yesterday. A handful of banks offer the loans tied to checking accounts, with the understanding that the lender can automatically withdraw the loan amount, plus the origination fee, when it is due. Regulators from the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp. are expected to clamp down on the loans, which carry interest rates that can soar above 300 percent, by the end of the week.
