The president of Goleta National Bank in California is anything but embarrassed about funding these short-term, high-rate loans despite the stigma attached to payday loans.
Just half a year after it experienced business, $340 million-asset Goleta estimates why these loans could take into account 20% of its earnings by the following year.
«Major banking institutions need to have a much closer understand this product and begin doing exactly the same thing i am doing,» said Lew rock, president and ceo. «Banking institutions want to get in there and commence competing when it comes to company.»
Approximately a dozen banking institutions will work with payday loan providers, which generally advance money against a person’s forthcoming paycheck. However the company is controversial, criticized for recharging interest that is excessive, mounting up costs by over over repeatedly rolling over loans, and threatening criminal action for unpaid loans.