By now, surely most people have heard of Payday Loans or Payday Advances; but, whatever you call them, they are loans, generally provided by check cashing stores or pawn shops. Interest rates are usurious and they often have features that can lock borrowers in for a long period of time, as noted in the linked Consumer Finance Protection Bureau bulletin,

The linked article, from the NY Times,, describes “Pension Advances”, loans that are tied to pensions. Another variation of such loans, “Deposit Advances”, are offered by commercial banks (i.e. Wells Fargo, U.S. Bank, Fifth Third, and Regions, etc.), in the following NY Times article, Be sure to note the interest rates cited in this Times article. Those are bank loans?

Remember that these loans are not providing any of your money in advance; rather, they are out-right loans, for which the borrower is being charged an exorbitant rate of interest–probably much higher than those on credit cards. Just like you don’t own your pay until you earn it, you are certainly not entitled to access pension funds until the proscribed date, or to take money out of a bank deposit account until it has the funds needed.

And, don’t let your guard down. When people hear the inclusion of certain words, such as pension or deposit, they think that it is a safe transaction. The only one of the three similar types of loans (Payday, Pension or Deposit Advance), which is subject to Government Regulation is the Deposit Advance, and the FDIC and Comptroller of the Currency might be considering placing certain restrictions on them, as noted in the linked bulletin from the CFPB,

As I have noted before, there are many people in the Financial Services Industry who would be more than happy to separate you from your money. Keep your guard up!



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  7. #7 by on September 4, 2014 - 5:03 AM

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  8. #8 by cheekos on September 4, 2014 - 2:43 PM

    I do not anticipate a Part 2, since I hate to be repetitive. Readers can keep up-to-date on this issue by checking in with the Consumer Finance Protraction Bureau web site (www,

    One thing that I might add, however, is that, when it comes to your own money, you just cannot trust anyone. The Financial Services Industry–banks, brokerages, wealth managers, mutual funds, insurance companies, etc.–have been licking their chops in anticipation of the Baby Boomer Retirement Movement, which started a couple of years ago. 10,000 per day, for 17 more days.

    Bankers are generally relied on to be one of the most trustworthy professions. Also, many banks today have representatives of their brokerage subsidiary located in their bank offices. Many people merely assumed that everything in that office is Government-backed, WHICH COULD NOT BE FURTHER FROM THE TRUTH. Bankers, brokers, insurance agents–across-the-board–are all mostly, if not totally, compensated for generating revenue–namely SELLING! Service is not even rewarded. So, as I have written before, KEEP YOUR GUARD UP! PROTECT YOUR MONEY!

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