NEW YORK, N.Y. – JPMorgan Chase is taking steps to protect its customers from fees and other charges that payday lenders may slap on them.
The bank said Wednesday it will limit the fees customers are charged when they overdraw their accounts to make payments to payday lenders.
It will also “enhance communication and require additional training” for employees, to make it easier for customers to stop payments. The bank will also make it easier for customers to close accounts even when there are pending charges, including payday lender payments.
Payday lenders are a controversial sliver of the financial system. They offer short-term loans, usually targeting the cash-strapped poor. They have high interest rates, making it hard for customers to repay the loans, and the spiral worsens when the payday lenders charge extra fees.