Some banks unfairly skirting loan laws

Short term lending is often a very lucrative option for people who need fast cash but won't be receiving their normal paycheck for a few weeks. This borrowing tactic is particularly good when an emergency expense pops up and needs to be paid off. However, to the detriment of consumers, some regions have restricted or altogether banned the industry. As such, people are left with few options when they can't normally qualify for traditional loans. Some banks, though, are allowing patrons to take out loans that are very similar to short term options. Regulatory agencies have taken notice, however, because skirting short term loan laws is not only frowned upon, but it creates an unfair monopoly on the local market. North Carolina banks under fire
This situation is something that citizens in North Carolina have had to contend with recently. According the News & Observer, though short term loans are illegal in the state, Alabama-based Regions Bank branches are offering comparable options to patrons. The source said Attorney General Roy Cooper is looking into legal options to stop the institution from skirting the associated laws. The service in question is Regions' Ready Advance loan, which spokeswoman Evelyn Mitchell told the source is meant for emergencies and allows consumers to tap into lines of credit, offering a loan structure that mirrors those of short term options. The only notable difference, the newspaper reported, is that these loans cannot be rolled over. The News & Observer said because the institution is based out of Alabama and Ready Advance is only available online, the loan option is able to squeeze through a loophole in the law, giving the bank an unfair advantage when lenders cannot offer their services. FDIC looking into bank loans
Because Regions is not the first bank to take this tactic to offer more services to consumers and increase their revenue, major federal agencies have begun investigating the legality of these types of loans. For example, the Federal Deposit Insurance Corporation has expressed interest in looking to validity of the bank-sponsored loans. "The FDIC is deeply concerned about these continued reports of banks engaging in short term lending and the expansion of short term lending activities under third-party arrangements," acting FDIC chairman Martin Gruenberg told the Huffington Post. The news provider reported the group has been particularly crucial of both Regions and Wells Fargo, as well as other institutions that have been accused of skirting various laws.