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Payday Lending

Payday lending can provide short-term access to credit, but it often comes with high rates of interest and expensive fees.

A handful of national banks essentially rented out their charters to third party payday lenders. The OCC found a number of abuses in these relationships. Of primary concern was the inability of small banks to properly oversee the third parties who were making loans in their names. Among the abuses: deceptive marketing practices, failure to secure confidential customer files, and unsafe and unsound lending. The OCC took a series of enforcement actions that eliminated these relationships from the national banking system.

01/31/2003 Peoples National Bank to Pay $175,000 Civil Money Penalty and End Payday Lending Relationship with Advance America
News Release 2003-06| Consent Order - Peoples National Bank | Consent Order - Advance America
01/21/2003 OCC Concludes Case Against First National Bank in Brookings Involving Payday Lending, Unsafe Merchant Processing, and Deceptive Marketing of Credit Cards
Release 2003-03 | Consent Order

Related News and Issuances
Publish DateIdentifierTitle
11/21/2018  NR 2018-125, Agencies Propose Community Bank Leverage Ratio for Qualifying Community Banking Organizations
11/21/2018  NR 2018-124, Agencies Announce Threshold for Smaller Loan Exemption from Appraisal Requirements for Higher-Priced Mortgage Loans
11/20/2018  NR 2018-123, OCC Issues Notice of Proposed Rulemaking to Exempt Residential Real Estate Transactions of $400,000 or Less from Appraisal Requirements