Some Banks are getting into the Payday Loan Business

The payday loan industry doesn't have the best reputation and now the nation's fifth largest bank is offering something similar to a payday loan. U.S. bank doesn't offer consumer banking in Texas, but it's an idea Texas banks may be considering.

John Heasley with the Texas Bankers Association says if Texas banks do this it'll be like overdraft protection.

"Historically, banks used to offer overdraft protection which would often serve this purpose but the Consumer Financial Protection Bureau issued regulations that pushed most banks out of offering the overdraft protection product. So, this could be an option."

Heasley says banks would be a lot safer than traditional payday loan houses, which are known for sky high interest rates and a seemingly never-ending cycle of debt. He says banks will be restricted to fixed rates and no surprises about what's owed.

"Fixed rates; you'd have to undergo a credit check; you only get one particular loan at a time -- it's meant to be a one off deal and not the payday product which can often go on for months and months and rollover and get into a debt cycle."

A Federal Reserve study found 40% of Americans can't cover an emergency expense of $400 and a study found 23% have no emergency savings at all.

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