PHOENIX — If banks are enabling lenders that are payday make withdrawals from their clients’ records on the objections of these account holders, they truly are prone to being penalized by their regulators, a business attorney warns.

Payday borrowers will frequently allow loan providers to withdraw re payments from their checking reports, but disputes can arise each time a debtor demands that the automated withdrawals be stopped. In certain circumstances banking institutions have let withdrawals proceed through anyhow and now have told customers that they’ll simply be canceled using the payday lender’s blessing.

Lynne Barr, someone at Goodwin Proctor, predicts that federal regulators will require enforcement actions against organizations which have permitted withdrawals that are such. Read more →