Loan system helps ‘unbanked’ climb financial ladder
FDIC program aims to assist low-income people eliminate payday advances
- E-mail icon
- Facebook icon
- Twitter symbol
- Linkedin symbol
- Flipboard icon
ARIZONA (MarketWatch) — Lilia Escajeda, a vice-president at Amarillo state lender in Amarillo, Colorado, claims she does not understand just why additional financial institutions you should not supply little loans to low- and moderate-income individuals.
“we’ve got increased tendency of individuals in low-income selections that we supply small-dollar financial loans to,” Escajeda mentioned. “If they meet the criteria that we has ready, capable see financing.”
Amarillo Bank is one of 31 commercial institutions in 26 states, including Texas, Louisiana and Illinois, participating in a Federal Deposit Insurance Corp. program to offer short-term, small-dollar loans of under $2,500 to low-income Americans, many of whom have low or no credit scores. Amarillo has offered small-dollar loans for decades, but roughly half of the banks in the program first started regardingfering them as part of the FDIC program.
The FDIC’s purpose should help the expected 80 million to 100 million so named under-banked People in america abstain from payday advance loan or overdraft products that provide fast profit but hold large charge or triple-digit rates of interest. The agency will discharge a final report on two-year plan in February 2010. Continue Reading
