Saturday, August 1, 2015

Berwyn lender fights with bank over military-loans cancellation

US Bank tries to cut off DFC's Military Installment Loan program

Berwyn lender fights with bank over military-loans cancellation


Berwyn-based DFC Global Corp. (Dollar Financial), which lends money to poor people and others with damaged credit at high rates of interest through Internet loan programs and more than 1,400 U.S. and foreign Money Shops and other outlets, says U.S. Bank is trying to cancel its financing for DFC's Military Installment Loan and Education Services program early.

U.S. Bank wants to stop funding the program effective immediately, according to DFC. DFC says U.S. Bank should respect its previous promise to keep funding the program until at least Sept. 13 while DFC negotiates with other funders. 

The program has been criticized for charging high interest to U.S. soldiers serving in Afghanistan and other war zones. See for example my colleague Jeff Gelles' column here, which tells how DFC -- and US Bank -- agreed to refund about $6.5 million, or $120 a person, to 50,000 service members who had borrowed through the program since 2010, after new federal Consumer Financial Protection Bureau boss Richard Cordray complained. (Each firm is providing about half the total, with DFC's share going to past and current customers of the program.) 

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PhillyDeals posts drafts, transcripts and updates of Joseph N. DiStefano's columns and stories about Philly-area business, which he's been writing since 1989.

DiStefano studied economics, history and a little engineering at Penn and taught writing at St. Joseph's. He has written thousands of columns and articles for the Inquirer, Bloomberg and other media, wrote the book Comcasted, and raised six children with his wife, who is a saint.

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