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Richard Cordray

Consumers who use online lenders often get hit with bank fees, U.S. watchdog says

Consumers who use online lenders often get hit with bank fees, U.S. watchdog says

Consumers who turn to online lenders when they need extra cash often miss payments and rack up hundreds of dollars in bank fees, according to a report issued Tuesday by the Consumer Financial Protection Bureau.

In its report, released ahead of proposed new rules governing the payday and online lending industries, the federal consumer watchdog found that half of borrowers who use online lenders don't have enough money in their bank accounts to cover a scheduled payment.

That's a problem because lenders often have permission to pull payments directly from a borrower's bank account. And when there's not enough money to cover a payment, banks can charge consumers either an...

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