Bank of America will begin to offer small, short-term loans to cash-strapped customers, the Charlotte-based bank announced Thursday, a move that could upend the market for short-term loans.
The loans, called Balance Assist, will have a $500 limit, and will only be available to people who have had a checking account at the bank for at least a year. The roll-out will start in a handful of to-be-announced states by January 2021 before expanding to the rest of the country early next year.
The move makes Bank of America — with its tens of millions of customers — one of the biggest financial institutions to have a small-dollar consumer loan.
It’s a space historically dominated by payday lenders and other consumer finance outlets, who gained seedy reputations for their high fees. Regulators have urged banks to get into small-dollar lending for years, and