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Small Dollar Lending
Providing financial services to those whose needs require special treatment, either because of the dollar amount of credit sought or other credit-related problems, has been a long-standing concern of CBA and its membership. Categories of those requiring such special treatment include low-income individuals and families, as well as military personnel and others who may be in temporary financial distress. CBA's Government Relations team has worked with financial regulators, the Department of Defense and the U.S. Congress to develop innovative financial products to serve the needs of those requiring special attention based upon their financial situation.
- January 16, 2018WASHINGTON, D.C . – Richard Hunt, President and CEO of the Consumer Bankers Association (CBA), released the following statement in response to the CFPB’s decision to reconsider its previously issued small-dollar rule: “The CFPB’s decision to revisit its small-dollar rule is welcomed news for the millions of American consumers experiencing financial hardship and in need of small-dollar credit,”...
- January 16, 2018In a statement on Tuesday, January 16, 2018, the CFPB said it intends to engage in a rulemaking process to reconsider the Small-Dollar Rule. Compliance with the rule by lenders is not mandatory until August 19, 2019, so the rulemaking would take place between now and then. As a technical matter, today was the official "effective date" of the final rule as published in the Federal Register; and...December 4, 2017A "safer" payday loan sounds like an oxymoron. Critics have branded these notoriously high-cost loans as debt traps that cause borrowers to go ever deeper in the hole. Thanks to a recent regulatory change, it now may be possible for banks to offer small, short-term loans that could be a lot less dangerous for borrowers. Whether banks will actually do so remains to be seen. The right moves could...November 3, 2017The Consumer Financial Protection Bureau states its mission is to “make consumer financial markets work for consumers, responsible providers, and the economy as a whole.” However, the reality is the bureau does not regard all consumers in the market equally. In the interest of political expediency, it seems to treat consumers who deal with some institutions different than those who deal with...October 31, 2017Over three weeks have passed since the Consumer Financial Protection Bureau finalized a rule that places new limits on small-dollar lending, but leading GOP lawmakers are giving mixed signals about whether members of Congress will aid the financial companies that oppose the regulation — unlike the months-long battle they waged to block a separate CFPB provision on mandatory arbitration clauses...October 12, 2017In the rule it unveiled last week , the agency sent a mixed message on that question. The CFPB effectively banned one type of bank loan: deposit-advance products, which were common before banks largely abandoned them due to 2013 guidelines issued by banking regulators. But the CFPB also exempted many small lenders from a core requirement of the rule—having to verify that borrowers can repay the...October 6, 2017CFPB Final Small-Dollar Rule Falls Short For Consumers The CFPB’s long-awaited small-dollar rule is finally here, and you guessed it! The Bureau whiffed at an opportunity to provide assistance to the millions of Americans experiencing financial hardship. It is hard to believe just days after the CFPB reported more than four in ten Americans were struggling to pay monthly bills – often because of...October 5, 2017The deregulatory winds blowing through Washington aren’t benefiting the $3.6 billion payday-loan industry, as the U.S.’s top consumer watchdog issued rules Thursday that will dramatically change how many companies providing expensive credit to cash-strapped borrowers do business. The Consumer Financial Protection Bureau regulations require that payday lenders determine upfront whether customers...October 5, 2017On Thursday, October 5, 2017, the OCC announced Acting Comptroller of the Currency Keith A. Noreika approved the rescission of the agency’s Guidance on Supervisory Concerns and Expectations regarding Deposit Advance Products that was published in the Federal Register on November 26, 2013 and its accompanying OCC Bulletin 2013-40 .October 5, 2017Lenders that offer payday loans and other small advances to cash-strapped consumers must first determine if the borrowers can afford to repay the debt under a long-awaited federal rule finalized Thursday. The rule, adopted by the Consumer Financial Protection Bureau, also would curtail repeated attempts by the lenders to debit payments from borrowers’ bank accounts, a practice that racks up...