The Centerfor Responsible Lending, an affiliate of the $410 millionSelf-HelpCredit Union in Durham, N.C., has issued a report attacking sixbanks for continuing to offer loans it says carry very highinterest rates and behave like payday loans.

The six banks are Wells Fargo, U.S. Bank, Regions, Fifth Third,Bank of Oklahoma and its affiliates and Guaranty Bank.

None of the banks named has yet responded to requests forcomment on the report, but Wells Fargo has a Frequently AskedQuestions document on its website about its Direct Deposit Advanceprogram, the loan program named in the center report.

“It is important to note this service is an expensive form ofcredit designed for short-term borrowing needs,” the Wells FargoFAQ reads. “Alternative forms of credit may be less expensive andmore suitable to your long-term financial needs. Talk to your WellsFargo banker for more details.”

Triple-Digit Danger: Bank Payday Lending Persists is anupdate of a similar report that the CRL prepared in 2011. In thatreport, the organization alleged payday lending taking place, underdifferent names, at the six banks. The new report updated the lastby indicating that the lending was still going on and documentingsome of its effects.

First, interest rates on the money are still very high. According to the report, an average 12-day loan at one of the bankswould run between 225% and 300%.

Second, the median number of loans that an average borrowerwould take out is 13.5 while more than 33% took at more than20.

Third, depositors that use the loans are twice as likely asothers to incur overdraft fees and more than 25% of borrowers alsoreceive Social Security payments.

The report also blames the loan's structure for helping to forceborrowers into taking out multiple loans.

“The fundamental structure of payday loans—a short loan term anda balloon repayment—coupled with a lack of traditional underwritingmakes repeat loans highly likely,” the report contended.

“Borrowers already struggling with regular expenses or facing anemergency expense with minimal savings are typically unable torepay the entire lump-sum loan and fees and meet ongoing expensesuntil their next payday,” it said.

“Consequently, though the payday loan itself may be repaidbecause the lender puts itself first in line before the borrower'sother debts or expenses, the borrower must take out another loanbefore the end of the pay period, becoming trapped in a cycle ofrepeat loans,” the report said.

The report acknowledged that the banks assert that they havesafeguards such as installment payments in place to keep the loansfrom becoming too financially burdensome. But the reportcharged the banks make the safeguards too difficult to use and thatthe number of loans per borrower strongly suggested they wereineffective.

In Wells Fargo's case, for example, the report said theinstallment loan program is only open to borrowers who have alreadytaken out three conventional direct deposit advance loans and owemore than $300 on existing loans.

The report calls on federal financial regulators to shut downthe loan programs as they are currently structured and only allowthem to restart under terms much more favorable to borrowers,including allowing what it called “affordable” installments andcapping interest at 36%.