A new report from a non-profit research group shows Wells Fargo Bank is the single largest financer of pay day lenders nationwide. The Public Accountability Initiative report claims nearly all big banks provide credit to pay day lenders, but Wells Fargo offers commercial loans to nearly a third of the industry.
Some Iowa activists are demanding the bank get out of the pay-day loan business altogether. State Senator Joe Bolkcom, a Democrat from Iowa City, says the bank is profiting from parasitic loan practices.
“It’s not acceptable for Wells Fargo to be in bed with these predatory lenders that abuse Iowa consumers,” Bolkcom said. “Would somebody else come in and give them the money? Maybe. But we need to press Wells Fargo to get out of this particular predatory lending scheme.”
On Tuesday, 50 members of the group Iowa Citizens for Community Improvement protested Wells Fargo’s involvement outside of two bank branches in Des Moines. Bolkcom says it’s hard to pass legislation to cap interest rates on pay day loans when they’re backed by influential lobbyists.
“These are extremely powerful financial interests that crashed our economy and now continue to take advantage of people in this rough economy, who struggle to make ends meet paycheck to paycheck and that use these services. And every time they use these services they’re ripped off,” Bolkcom said. Last year, Iowans owed some 300 million dollars ($300 million) to pay day lenders, who on average, charge annualized rates of 450%.
A spokesperson for Wells Fargo issued a written statement saying payday loans are a small percentage of the bank’s portfolio and the bank doe not engage in irresponsible lending.
See the report here: public-accountability.org