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.
  • October 5, 2017
    WASHINGTON (Reuters) - Revenues for the $6 billion payday loan industry will shrivel under a new U.S. rule restricting lenders’ ability to profit from high-interest, short-term loans, and much of the business could move to small banks, according to the country’s consumer financial watchdog. The Consumer Financial Protection Bureau (CFPB) released a regulation on Thursday requiring lenders to...
  • October 5, 2017
    Washington, D.C. - Richard Hunt, President and CEO of the Consumer Bankers Association (CBA), released the following statement in response to the issuance of the CFPB’s final rule on small-dollar lending: “The CFPB whiffed at an opportunity to provide assistance to the millions of Americans experiencing financial hardship,” CBA President and CEO Richard Hunt said. “It is hard to believe just days...
  • October 5, 2017
    The Consumer Financial Protection Bureau will require payday lenders to verify income and take other steps to protect borrowers, issuing a long-awaited rule that has become tangled in a tug of war over Director Richard Cordray’s future. The rule limits how often a lender can attempt to debit a borrower's account, a practice that can rack up bank fees. It also curbs lenders’ ability to advance...
  • October 5, 2017
    On Thursday, October 5, 2017, the CFPB is releasing its long-awaited small dollar lending rule . According to the CFPB, the rule aims to stop debt traps and apply to loans that require consumers to repay all or most of the debt at once. Under the new rule, lenders must conduct a "full-payment test" to determine upfront that borrowers can afford to repay their loans without re-borrowing. (The OCC...
  • October 5, 2017
    The 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, 2017
    On 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, 2017
    Lenders 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...
  • September 29, 2017
    CBA to CFPB: Help Banks Serve Consumers in Need of Short-Term Credit A huge segment of consumers are struggling to make ends meet in a given month – 43 percent to be exact – according to a new CFPB survey. Since the FDIC and OCC issued guidance essentially pushing banks out of the small-dollar lending market, consumers have been forced to use less-safe, less-regulated and more costly entities to...
  • September 28, 2017
    By now, the sobering statistics are familiar: Nearly half of American adults say they could not cover an unexpected expense of $400, according to the Federal Reserve. Now, a new study by the Consumer Financial Protection Bureau (CFPB) similarly shows that more than 40 percent of Americans struggled to pay bills at some point during 2016. But, familiarity doesn’t make it OK. Richard Hunt,...
  • September 27, 2017
    CBA’s Hunt: “We encourage the CFPB to work in coordination with other financial services regulators to create a consistent regulatory environment that does not take away the ability for families with unexpected financial hardships to seek responsible, short-term assistance from their bank.” Washington, D.C. – Richard Hunt, President and CEO of the Consumer Bankers Association (CBA), today wrote...

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