Need for same day loans is tremendous, FDIC states

According to FDIC chair Sheila Bair, personal loans are in "tremendous demand" in the U.S. This means small-dollar loans are attractive to consumers and to mainstream financial institutions like banks and credit unions. Findings in a recent Government Accountability Office report indicate that banks have tried to meet the demand, however failed miserably. Post resource – Demand for same day loans is tremendous, FDIC says by MoneyBlogNewz.

Payday advance alternatives – and the banks that can’t deliver them

same day personal loans from a small lending outlet and same day loans from banks and credit unions will be entirely different due to the fees and terms that are required. The GAO suggest that the Dodd-Frank Act and other FDIC changes in recent months may increase traditional financial institutions’ willingness to offer same day loans, but the results may not be what banks expect:

“Recent statutory and regulatory changes and FDIC initiatives may encourage more institutions to offer small-dollar loan alternatives to payday loans or expand their availability, but many consumers may still chose to use payday loans for their wide availability and relative lack of eligibility,” says the GAO report.

Banks and credit unions could not do lots of payday cash advance alternatives without subsidies from either the government or charitable organizations in accordance with a two-year FDIC program. The consumer base for personal loans was excluded in the needs for underwriting also.

Use payday loan without concern of losing a job

Just because you get a same day loan does not mean that your financial reputation is ruined. The GAO report proved this. A screening process is done, including financial history, for all applicants of Federal agencies including the Transportation Security Administration, the Federal Bureau of Investigations and the Department of Homeland Security. There are financial evaluation tools for instance credit states used.

The screening process was done to hire for high security positions, explained the Government Accountability Office. Whether or not a short term installment loan was used didn’t factor into that. The presence of risky patterns of financial behavior is essential, however, which underscores the important of financial responsibility – for government employees and customers in general. If banks and credit unions could ever free themselves from the policy maze and judge same day loan applicants over a more broad range of financial responsibility, perhaps the institutions could sell same day personal loans directly to consumers.

Citations

Community Financial Services Association of America

cfsaa.com/about-the-payday-industry/myth-vs.-reality.aspx

Government Accountability Office

gao.gov/highlights/d11147high.pdf

Don’t live beyond your means, even with payday loans

youtube.com/watch?v=KjZBOCAgR64