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OCC Finds Legal Violations and Unsafe Banking Methods
WASHINGTON , Sept. 24, 2012 /PRNewswire-USNewswire/ — the federal government overseer of big banking institutions, any office of this Comptroller regarding the Currency (OCC), has discovered “violations of legislation and laws and unsafe and banking that is unsound” by Florida -based Urban Trust Bank (UTB), the issuer associated with the Insight prepaid cards utilized by the payday lender CheckSmart to evade state payday and usury regulations. The nationwide customer Law Center (NCLC) detailed considerable appropriate issues with the lender’s prepaid credit card payday advances in a page delivered by NCLC, the middle for Responsible Lending, and also the customer Federation of America to your OCC in might. The OCC reacted that the buyer teams’ page “raises a few unpleasant concerns,” including “that the prepaid cards are offered in cooperation by having a major payday lender” and have “characteristics comparable to predatory payday loans.” “Banking institutions must not help payday lenders to evade state legislation,” said Lauren Saunders , handling lawyer of nationwide digest Law Center’s workplace in Washington, DC . “We applaud the OCC for examining the sordid relationship between Urban Trust Bank plus the CheckSmart card that is prepaid loans, and urge the OCC to eradicate pay day loans totally through the Insight prepaid cards,” she included.
UTB and CheckSmart have actually discontinued one form of the card that is prepaid loans but continue steadily to provide payday advances cloaked as overdraft charges of $0.15 per $1 negative stability (or $15 per $100 lent). The OCC has entered into an official contract with UTB needing the lender to improve appropriate violations, to submit an analysis of its prepaid credit card system that “fully assesses the potential risks and great things about this type of company,” also to submit for OCC review a small business plan that addresses too little its oversight of CheckSmart. “Prepaid card payday advances can not be fixed, and Urban Trust Bank should get free from this business,” stated Saunders.Continue reading