The increase in unbanked and underbanked consumers, reported by the Federal Deposit Insurance Corporation, suggests many Americans are searching for alternative credit
options. However, not all financial incentives assist consumers in an even-handed manner. Recently, federal banking regulators from the Office of the Comptroller of the Currency (OCC) cracked down on a community bank in Orlando, Florida, for offering prepaid debit cards alongside short-term loans provided by third parties, The Wall Street Journal reports. The financial institution, Urban Trust Bank, defends charges that its banking practices are "unsafe" and "unsound" by explaining that it has a strong relationship with the short term lending companies that helped to sell its prepaid cards. As part of an agreement with the OCC, Urban Trust will submit an analysis of its prepaid card services, according to the paper. The report will examine the risks the cards entail as well plans to strengthen oversight of vendors supplying the prepaid cards. For local, state and federal governments, short term lending operations have come under increased scrutiny, causing some cities to enact stringent regulations on the businesses.