Tuesday, March 31, 2009

FDIC Slaps Order On Republic Bank

According to an article over at the Lexington Herald-Leader, the FDIC has stated Louisville-based Republic Bank is in violation of consumer protection laws in the tax-refund loan business. Here's an excerpt from the H-L:

"In a 16-page cease and desist order, the FDIC ordered Republic to end the practices by retraining those involved in the loan program, including outside loan originators, and by conducting regular audits to ensure the program complies with the law.

The agency also ordered the bank's board of directors to appoint a committee of directors to meet monthly to review bank management's compliance with the order.

...The Republic loans are offered by more than 8,000 originators nationwide, including Jackson Hewitt Tax Services, Republic's largest refund-loan client...

Consumer groups have repeatedly said that Republic's refund anticipation loans are the most expensive of any lender. It looks as though one can get a better rate from an independent loan shark. The official "cease and desist" order can be seen HERE.

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