According to a recent study by Scripps Howard News Service, the cash advance payday lending industry pulls in about $35 billion dollars per year. Surprisingly, the average cash advance customer is middle income middle class, using the short term loans for sudden expenses. This controversial industry has been looked down upon by government agencies due to the higher APRs and fees associated with payday cash advances. Recent studies prove that even with the higher APRs and fees, payday advances are generally lower than bank overdraft or late fees.

Perhaps this is why top banks like U.S. Bancorp, Fifth Third Bancorp and Wells Fargo, have decided to adapt a form of payday advances in their own product ines. The Scripps Howard News Service study claims an estimates $7.3 billion in fees annually from payday loan customers. Many banks, finding themselves suffering from economical hardships may not be able to resist the temptation of that stream of income.

Flint Journal reports that Fifth Third Bancorp says the loans range up to $500 up to once per month come with an APR of 120 percent.  That works out to be about $10 per $100 borrowed. Standard Payday Advance Loans usually range from about $10-$20 depending on the lender, state, and local regulations. Flint Journal reports that Fifth Third Bancorp claims this is a product meant to help in emergency situations on a short term basis.

While rates and conditions vary, the banks offering these short term loans offer very similiar terms. Recent press releases indicate payday lenders welcome the banks to the cash advance market, but not everyone agrees. An assembly of demonstrators called N.C. United Power protesting banks mentioned payday loans as one of the products they consider bad practice.

Payday Cash advances are often the only option for unexpected emergencies as opposed to overdrafting, bouncing checks, or paying exhorbitant late fees. Banks entering the market may help reduce the animostiy politicians have shown towards payday lending. They may be able to pursuade states which have banned these loans completely to re-allow them, allowing options for these state’s citizens.

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Nation's Large Banks now Offering Payday Loans

Nation’s Biggest Banks now offering Payday Loans to Customers

Payday Lending has become so mainstream that two of the largest banks in Nashville Tennessee have begun offering Payday Loans to their customers. Its true. Us Bank and Fifth Third now have Payday Loan programs for their customers and offer a 35 day payday loan to selected customers who have direct deposit paycheck accounts, and no credit check is required. The loans have an annual percentage rate of 120 percent, or a 10 percent fee. Short-term loans like these obviously have a higher rate of credit than longer-term loans

Tennessee law requires customers receiving a payday loan to have a checking account, a job, and a paycheck.

With Bank One and Fifth Third bank moving into Payday, it is probably only a matter of time that the top ten banks in the nation begin some form of Payday Check Cash advance lending in the future.

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