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Evil Payday Loans vs Sinful Overdrafts
Created by m.moebs on 6/23/2022 12:20:10 PM

Do Payday Lenders deserve the bad rap they have?
Why are millions of Americans going to Payday Lenders?
Are Banks and Credit Union Fees from Overdrafts in Trouble?
Read the answers.

Where does the Consumer Go when Short of Funds?
Moebs $ervicesLake Forest, IL (June 21, 2022) Many a preacher has disparaged payday loans and overdrafts as the work of the devil. Yet over 80 million Americans have used one or the other or both, and often more than once.
“Net fee revenue from overdrafts is 15% of net income for most depositories but 44% of net income for all credit unions (CUs),” says Michael Moebs, Economist, CPA, & CEO of economic research firm Moebs $ervices (M$). The new M$ Study on Payday Loans plus ODs determined the median end-of-day overdrawn balance for Americans short of funds is about $40. The median charge for a payday loan of this amount is $17.65 while an overdraft is $30. “The difference of $12.35 is 41% less at a payday lender, so if you have a cash crunch where does the consumer go?” states Moebs.
A recent state conference of CU CEOs found unanimously these executives steadfast in keeping their OD price at $30.
“Banks and thrifts will be able to withstand payday lending competition, but many CUs who rely on overdrafts for net income will suffer the loss of revenue substantially unless they quickly adapt to the new OD environment.” READ FULL ARTICLE

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