Now that financial reform has passed, there have been a few “reports” predicting that banks are going to go after the payday lending customers.  Although this could be the case in a few states or branches, big banks have typically stayed away from anyone with less than perfect credit.

Last year (2009) big banks made upwards of 38 BILLION dollars on overdraft and NSF fees.  With this summer’s enactment of Regulation E, banks are facing huge losses due to customers declining the overdraft protection option.  We’re already seeing a flood of changes to the banking industry, for example most banks have already stopped offering free checking accounts to new customers.  Free checking accounts were the “norm” for the last decade, but now that banks won’t be making money off of potential overdrafts, customers are already paying elsewhere.  New account customers are facing monthly charges, online charges and more in an attempt to salvage revenue losses due to Regulation E.

Now, some are guessing that banks will turn to the 20 million payday loan customers now that the financial protection bill is signed, and aiming to regulate small loan options such as payday loans (cash advances).  I personally feel, as well as the editor’s of the Payday Pundit our industry’s news site run by the CFSA (Consumer Financial Services  Association of America) which promotes responsible lending practices throughout our industry, that banks will most likely stick to their habit of shying away from customers with bad credit.  The few banks that have tried to offer payday loan type products in the past have done so with rarely a sign of success.  After all, most people with credit problems who need just a little cash until payday would not even think to waste time stepping foot inside of a bank lobby.   Also, our industry has a very high rate of satisfaction and a very low number of registered complaints, meaning that our customers are very happy with what we offer!  Many in our industry can attest to this, and anyone who has ever worked in a PDL storefront has certainly heard a sincere “thank you” for providing a much needed service to folks who can’t get approved anywhere else.

You want our customers big banks?  Go ahead and try!