CFPB, Federal Agencies, State Agencies, and Attorneys General
OCC lending that is small-dollar: one step of progress but one action right back?
The OCC has granted a bulletin (2018-14) establishing forth key financing axioms and policies and methods for short-term, small-dollar installment lending by nationwide banking institutions, federal cost savings banking institutions, and federal branches and agencies of international banking institutions.
The OCC reported it “encourages banking institutions to provide accountable short-term, small-dollar installment loans, typically two to year in extent with equal amortizing repayments, to simply help meet up with the credit requirements of customers. In issuing the bulletin” The bulletin is intended “to remind banking institutions of this core financing maxims for prudently handling the potential risks related to providing short-term, small-dollar installment lending programs. ”
The bulletin records that in October 2017, the OCC rescinded its help with deposit advance items because continued conformity with such guidance “would have exposed banking institutions to possibly inconsistent regulatory direction and undue burden while they ready to conform to the CFPB’s final payday/auto title/high-rate installment loan rule (Payday Rule). ” by means of background The guidance had efficiently precluded banks at the mercy of OCC direction from providing deposit advance services and products. The OCC references the CFPB’s intends to reconsider the Payday Rule and states it promises to make use of the CFPB as well as other stakeholders “to make sure that OCC-supervised banking institutions can responsibly participate in customer financing, including borrowing products included in the Payday Rule. [Read more…] about Customer Finance Track