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Two banks to nix short-term, high-interest loans

By Bill Gephardt | Posted - Jan 24th, 2014 @ 9:03am


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SALT LAKE CITY — Consumer advocates are claiming victory against predatory loans now that two big banks say they will nix their short-term, high-interest loans.

Separately, some colleges now are making payments on their students' loans. And a mix up sent BlackBerry share prices up, then down.

Ending direct deposit advances

Recently, KSL explained how federal regulators were essentially telling banks to stop issuing short-term, high-interest loans with balloon payments. The industry calls them direct deposit advances, and consumer advocates say they are no better than payday loans.

Now, two banks — Wells Fargo and U.S. Bank — say they will end the practice next week.

Last summer, a California woman showed a U.S. Senate panel how her $500 direct deposit advance ballooned to $3,000 in fees.

Some colleges paying student loans

Looking to fill classrooms, some colleges are promising to help students pay their student loans.

Dozens of private colleges are now offering loan repayment assistance programs. The schools will make the loan payments until the student snags a good-paying job and can afford to take over the full payments.

BlackBerry clarification: Pentagon statement sends share prices down

And a "misunderstanding" took a toll on BlackBerry's stock. Last week, the Department of Defense announced it launched a new mobile network supporting 80,000 BlackBerry smartphones among other devices.

Many investors thought that meant the Pentagon was ordering 80,000 new BlackBerries, sending share prices up 5 percent.

But no. Thursday, the Pentagon clarified those 80,000 phones are ones it already owns, not new phones. Once that word got out, share prices tumbled back down.

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