Why do Big Banks Hate Short-Term Loan Companies?
One of the biggest causes for big banks hating relatively small-sized short-term loan businesses is mostly because the smaller companies are eating away at their ability to have a monopoly on the market — credit cards. The big finance industry has their APR rates limited, and they do not offer the small loans like payday loan companies offer because it would not be profitable for them. At the same time, they look at the blossoming payday loan business and see that they are making huge profits, while serving millions of people daily. There is some legislation afoot in many states, and countrywide, to limit the APR interest rates allowed by short term lenders to about 36%. Currently, they charge from around 456% to as much as thousands of percent in interest, making their short term loans very lucrative. Of course, if the financial institutions cap the APR of short-term loans, then they’ll be able to wipe out the little guy who wouldn’t make ANY money per loan. This would force people in
