Although the U.S. unemployment is at a record low, many Americans struggle financially as wage growth remains stagnant.
However, U.S. Bank has set out to create a solution for its customers who may be facing financial difficulty.
The company recently announced the launch of a new loan product designed to help customers deal with unexpected short-term cash needs.
The product, Simple Loan, allows U.S. Bank checking account customers to borrow between $100 and $1,000 without paying hidden fees.
Borrowers can receive immediate access to these funds with simplified pricing of $12 for every $100 borrowed with autopay from a U.S. Bank checking account, or $15 for every $100 paid manually. Put another way, that's an interest rate of either 12% or 15% for borrowing $100. Customers can repay their loans over three months with three fixed payments.
U.S. Bank Consumer Banking Sales and Support Executive Vice President Lynn Heitman said the company is focused on powering the potential of their customers.
“So, every day we work to be there in the moments that matter to them the most," Heitman said. "Sometimes those moments are the unexpected ones when customers need short-term access to funds they don't have on hand. We saw this as a need we could help with by providing customers with a trustworthy, transparent loan option."
The bank champions itself as the first national bank to offer this type of short-term loan solution, and has worked closely with regulators to develop the product over the last few years.
According to the company, when it first tested the product in 2016 and 2017, it discovered customers appreciated that their loans were reported to credit agencies, giving them the ability to build their credit.
In order to ensure the product positions customers for even more success, borrowers can only obtain one Simple Loan at a time and must wait thirty days after repayment to apply for an additional loan.
"Simple Loan is a major step for a national bank to provide small-dollar loans with longer payment schedules to fit consumers' complicated financial lives," Founder and CEO of Mission Asset Fund and member, U.S. Bank Community Advisory Committee José Quiñonez said. "I only hope that others follow U.S. Bank's lead in the future, because consumers all across the country desperately need credit, even if it's $100 or $1,000 at a time."
