JPMorgan Chase clamps down on payday lenders

JPMorgan Chase & Co., the largest U.S. bank, is making it easier for customers to fight abuses by payday lenders.

JPMorgan will stop processing multiple requests for payment on checks that have already been returned because of insufficient funds when payday lenders and other billers are suspected of seeking “inappropriate payments,” the New York-based company said Wednesday in a statement.

The change, which takes effect in May, “is intended to address payday lenders and others who present repeated payments to customers that are not in the spirit of their signed agreement with the customer,” JPMorgan said in the statement.

The bank also said it would limit the fees customers are charged when they overdraw their accounts to make payments to payday lenders.

Payday lenders are a controversial segment of the financial system. They offer short-term loans, usually targeting the cash-strapped poor. The loans generally come with high interest rates.