Federal Guidelines on Small Dollar Loans
Recently the Native American Financial Services Association (NAFSA) wrote about an update to guidelines on small dollar loans from the US Government.
Four federal financial regulatory agencies recently released guidance titled ‘Interagency Lending Principles for Offering Responsible Small-Dollar Loans,’ encouraging credit unions, supervised banks, and savings associations to offer lending products to meet the short-term credit needs of financial institutions customers. The guidance was released by the Federal Reserve Board, the Federal Deposit Insurance Corporation (FDIC), the National Credit Union Administration (NCUA), and the Office of the Comptroller of the Currency (OCC).
These four regulatory agencies typically offer advice and guidance whenever major cases are settled or new legislation is offered. This guidance is offered to help small-dollar loan providers the necessary information to make sure people who take financial loans are all on the same page and to make sure that their lenders don’t take advantage of them. The FDIC offered a fact sheet that helps summarize exactly what changes were made and how they apply to previous guidance as well as certain facts about borrowers, such as:
- 37 percent of U.S. adults in 2019 would borrow, sell something, or not be able to pay if faced with a hypothetical $400 expense.
- Additionally, 1-in-5 U.S. adults reported using alternative financial services, including small-dollar loans, through providers other than traditional banks and credit unions.
LDF Holdings strives to offer the best customer service and loan products to our consumers. LDF Holdings is responsible for keeping up with the latest rules and regulations and ensuring our TLEs are operating in full compliance.
For more information see:
NAFSA Article
FDIC
NCUA