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The Boston Globe

Nation

Banks’ role in payday loans gets scrutiny

Act as collectors of interest that could top 500%

NEW YORK — Major banks have quickly become behind-the-scenes allies of a raft of Internet-based payday lenders that offer short-term loans with interest rates sometimes exceeding 500 percent.

With 15 states banning payday loans, a growing number of the lenders have set up online operations in more hospitable states or far-flung locales like Belize, Malta, and the West Indies to more easily evade statewide caps on interest rates.

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