The FDIC has announced it will investigate bank payday loans in response to a February petition signed byapproximately 250 consumer rights advocates that was critical of aFiserv lending software program marketed to credit unions.
|The petition called out Wells Fargo & Co., U.S. Bancorp,Regions Financial Corp. and Fifth Third Bancorp for their lendingpractices and cited Fiserv's Relationship Advance lending software for contributing to theproblem, saying it promises to increase fee income.
|According to a release on Fiserv's website, the company launchedthe lending module in late 2009 response to challenges faced bycourtesy pay programs.
|“The FDIC is deeply concerned about these continued reports,”said Martin Gruenberg, acting chairman, in a letter to Americansfor Financial Reform, a Washington-based advocacy group thatspearheaded the petition. “Consequently, I have asked the FDIC'sDivision of Depositor and Consumer Protection to make it a priorityto investigate reports of banks engaging in payday lending andrecommend further steps by the FDIC.”
|Jeff Burton, vice president and managing director of Fiserv'sRevenue Enhancement division, did not immediately return a call forcomment.
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