US Bank sells “Simple Loans” with 70-88 percent interest in Montana. People take these loans to buy snow tires, cover a mortgage payment, or pay medical bills. Montana law caps predatory payday loans at 36 percent interest. But federally-insured banks are exempt from state laws, and can charge whatever they want to.
These are the kind of bad loans that people never get out of, being offered by one of the biggest national banks. High interest rates leave customers reeling for another loan, trapping them into a cycle of debt. I’m sorry, but if it looks like a payday loan and charges like a payday loan, it probably is one.
The Military Lending Act requires banks to offer less than 36 precent interest on loans for service members and their families, but what about veterans? What about the rest of us? We work hard for our money. No one should profit off trapping people in debt, but especially not huge companies with branches across the country.
US Bank should rethink this product, and if it thinks profiting off of someone’s spiraling debt is a good business practice, then I hope customers close their accounts and go to someone who isn’t trying to con them.
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