Trillium News

Trillium Statement on Fifth Third Bank’s Announcement Regarding the Phasing Out of ‘Early Access’ Deposit Advance Service

January 28, 2014: Fifth Third Bank (NASDAQ: FITB) recently announced that it will no longer enroll customers in its ‘Early Access’ deposit advance service after January 31, 2014 and the bank will phase out the service to existing customers by year-end.
This announcement comes following ongoing pressure from Trillium Asset Management (Trillium), along with other investors and the Center for Responsible Lending.
In 2012 Trillium filed a shareholder proposal, with the bank asking it to address “the adequacy of the company’s direct deposit advance lending policies in addressing the social and financial impacts” of “extending high-cost direct deposit advances that resemble payday loans”.
In that shareholder proposal Trillium reiterated that the FDIC has stated that “providing high-cost, short-term credit on a recurring basis to customers with long-term credit needs is not responsible lending, increases institutions’ credit, legal, reputational, and compliance risks; and can create a serious financial hardship for the customer.”
Trillium is pleased that Fifth Third has made the decision to phase out its deposit advance product. This product also posed regulatory, legal, and reputational risks to the company.
In April 2013 the Federal Reserve issued a supervisory statement emphasizing the “significant consumer risks” the deposit advance product poses and highlighted some earlier Consumer Finance Protection Bureau (CFPB) findings regarding concerns over sustained and harmful repeat usage. The CFPB advised that examiners thoroughly review bank payday products for compliance with laws prohibiting unfair and deceptive practices.
We have been concerned about this product for years as research has long shown that the cycle of debt created by these kinds of loans may cause serious financial harm to borrowers, including increased likelihood of bankruptcy, paying credit card debts and other bills late, delayed medical care, and loss of basic banking privileges because of repeated overdrafts.
We are mindful that predatory lending practices have cost households billions in fees and catalyzed instability in both the housing and financial markets. Payday lending can perpetuate this instability, draining productive resources from the economy as a whole.


For more information, please contact Randy Rice at or (617) 515-6889