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Payday lending criticized in Grand Rapids

6:29 PM, Feb 6, 2014   |    comments
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The average overdraft charge rose 3% in 2013, to a record $32.20, Bankrate says. (Image courtesy: Associated Press)

GRAND RAPIDS (WZZM) -- Payday lending practices came under criticsm Thursday by a group that says it seeks social justice.

The Micah Center calls itself "a grassroots movement of people of faith... who promote education and action related to justice in the Grand Rapids community and throughout West Michigan."

Center officials Thursday said they met last fall with officials of Fifth Third Bank regarding their offering payday lending products.  Those products offer loans with huge interest rates.

Last month, Fifth Third stopped the practice, according to the Rev. Dallas Lenear, a Center spokesman.   Other banks that stopped the practice, he said, were Wells Fargo, Regions Bank and U.S. Bank.

"It will help people in Grand Rapids because now, they will not turn to these predatory products and they'll keep some of their own money in their pocket," Lenear said. 

Rev. Lenear said there are still many storefront payday lending outlets in Grand Rapids, some of which he says offer loans with interest rates and fees of up to 400%.

Grand Rapids Mayor George Heartwell said other muncipalities have restricted such stores, something he says Grand Rapids may consider.

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