We all know how it’s easy to be approved for an online loan in Nevada. What many of us don’t know is that it used to be very easy to get approved for a bank issued payday loan. The banks didn’t refer to these loans as payday loans but that’s what they were. About a decade ago, most of the largest banks in the country rolled out what’s called a direct deposit advance. These were short term loans that were backed by the collateral of a customer’s upcoming direct deposit. Much like Las Vegas payday loans, these advances came with high interest rates and further penalties if they weren’t paid back in full. Many of these loans actually had higher interest rates than the much maligned payday loans!
Direct Deposit Advances were probably more popular than traditional payday loans a few years ago. Anyone could have walked into their local branch in Las Vegas or Reno and received a few hundred dollars as an advance for their next deposit. Short term loans were very popular in cities like Las Vegas right when the recession hit. Many finance companies made millions of dollars off these loans over the past decade. Some, tried to spin the offer as a customer service product. Banks claimed they were giving customers access to cash when they needed it most. The only difference is the bank marketing departments would never refer to these financial instruments as a short term loan. Many of the highest rated banks were making millions off this financing but the Federal Government decided to put a stop to it. What’s interesting is that many financial companies like Wells Fargo and Chase have long been against payday loan companies. They say the rates are too high and too many people are taken advantage of. Now we know how the banks really view the situation!
When the Government found out what was happening they made sure to put a stop to this practice. The Office of the Comptroller issued a statement saying deposit advance loans needed to be affordable. It’s clear to everyone involved in the situation that banks were trying to make Nevada payday companies look bad. All the while they were rolling out lending products with higher interest rates. Often the terms were worse than what was provided by Las Vegas payday loan companies. We see some debate about the difference in rates and payoff time. But it’s apparent that these loans had much higher rates when compared to Nevada installment loans. Even today, most installment loans in Las Vegas are looked at as having high interest rates and fees. But there was never any issue when the banks did this a few years ago. In 2014 the Government mandated that banking institutions stop this practice. The changes meant more disclosure of information to their customers who take out these direct deposit advances. Instead of doing this most banks decided to scrap the short term lending programs. Now this type of loan is exclusively provided by companies with physical offices in Nevada. There are also many companies who provide online payday loans in Nevada.. These online companies tend to have higher fees than the traditional lenders you see in Las Vegas or Reno. Make sure that any lender is registered with the state of Nevada. They also need to disclose their lending practices details about maximum loan amounts. By giving more disclosure they will increase the odds of winning your business. Any company that doesn’t want to disclose a financial contract or regulatory information is a big red flag. By researching your online company you should be able to make a lending decision that suits your cash needs.