In a move that has consumer advocates rolling their eyes so hard they might need chiropractic treatment, Credit Bank — the self-proclaimed “financial lifeline” for people without a credit score — has proudly announced a $15 million funding round. The cash injection will, according to the bank, “expand financial opportunities” for the underserved.
Translation? They’ve got $15 million to slap sky-high interest rates on the people least able to afford them.
For decades, not having a credit score meant you’d need to rely on old-fashioned tactics: saving money, avoiding debt, or, heaven forbid, borrowing $20 from your cousin Steve. But Credit Bank believes they can “modernize” this process by giving loans to the creditless — while taking a healthy cut for themselves.
“They’re basically monetizing desperation,” says Rita Callahan, a consumer watchdog who describes the company’s business model as “a payday loan shop in a tech hoodie.”
Supporters argue that the bank is simply filling a gap in the market. Critics counter that the “gap” exists for a reason — namely, to stop vulnerable borrowers from signing onto repayment plans that feel less like financial aid and more like a financial chokehold.
When asked about interest rates, a Credit Bank spokesperson said the terms are “competitive.” Unfortunately, in the lending world, “competitive” often means “competing to see who can squeeze the most pennies from your empty wallet.”
The company is already planning to use the $15 million to expand its advertising reach, particularly toward communities with lower financial literacy. “We’re making sure everyone knows they have the right to get into debt — even if no one else thinks they’re ready for it,” the spokesperson added, somehow without irony.
Consumer advocates warn that this new funding round may signal a growing trend: turning financial inexperience into a profit center. “It’s not charity,” Callahan says. “It’s capitalism with a smiley face sticker.”
Credit Bank insists that their mission is rooted in empowerment. And maybe it is — if you define empowerment as “letting you hold the shovel while we dig the hole you’ll be paying off for the next decade.”