(Reuters) – Bank of America Corp BAC.N It said Thursday it was launching a new low-cost loan product for ordinary customers who may be squeezed for cash.
Balance Assist, which will be available starting in January, allows customers to borrow up to $ 500 for a flat fee of $ 5 and repay the amount over a three-month period. Clients must have a checking account at the bank for at least one year to be eligible for the loan.
Earlier this year, US regulators urged banks to seriously consider making short-term loans to struggling individuals and businesses to help them make ends meet during the coronavirus pandemic. Banks have largely abandoned the practice in recent years amid regulatory scrutiny.
“Financial health has never been more challenging for the millions of consumers who experience short-term cash gaps due to volatility in income or unexpected expenses,” said Jennifer Tescher, CEO of Financial Health Network. “We need more institutions to offer credit for little money, so it is encouraging that Bank of America has developed an alternative to overdrafts and payday loans that is safe, transparent and affordable, with the real potential to improve health. financial “.
Report by Imani Moise; Editing by Steve Orlofsky
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