As we have discussed in the past few weeks, Ohio recently enacted some tough laws regulating lenders who issue payday loans in Ohio. It looks like several national banks may step in to take advantage of the regulations.
Most banks are Federally regulated. As such, the new State laws in Ohio regarding payday loans may not apply to them. Since customers in Ohio will still need sources of emergency cash, someone will need to provide short term loans. Most payday lenders will not be able to profitably operate under the restrictive payday loan laws. However, national banks may take advantage of the opportunity.
For example, Wells Fargo, U.S. Bank and Cincinnati-based Fifth Third are offering Ohio residents cash advances to be covered by their next direct deposit. The fees are similar to those charged by payday lenders — around $10 for every $100 borrowed.