Banks are involved on both ends of every Internet payday loan delivered by the ACH system. A consumer’s bank receives the loan proceeds direct deposited into the consumer’s account and electronically withdraws payment on the due date.

If funds are not sufficient to cover the withdrawal, an insufficient funds fee is levied. The payday lender’s bank initiates the loan electronically and receives the payment on the due date.  The National Automated Clearing House Association (NACHA), the industry self-regulatory group, writes and enforces the voluntary rules that govern bank use of the ACH system.

County Bank of Rehoboth Beach, DE was the only bank found by the survey as the purported lender for online non-bank payday lenders.  A Google search in March 2004 for County Bank turned up over twenty-nine URLs for sites where loans were made online. Many of the URLs led back to the same web site. The County Bank-affiliated web sites stated that loans are not made to consumers in one or more states, including Colorado, Delaware, Florida, New York, California, Idaho, and West Virginia. 

The cost of payday loans marketed on these sites ranged from 573% APR to 782% APR in the instances where cost information could be found. A complaint filed in New Jersey alleged that County Bank made loans through servicing agents costing 780% for a two-week term despite New Jersey’s 30% usury cap.