FDIC Seeks Information on Small-Dollar Loans

The FDIC is seeking public feedback on the steps it can take to encourage FDIC-supervised banks to offer small-dollar credit products to meet the needs of consumers, the agency announced today. Comments will be due 60 days after publication in the Federal Register.

Specifically, the FDIC is seeking information about consumer demand for small-dollar credit products, features and characteristics of these products, and the benefits and risks to banks offering them. The FDIC is also interested in the challenges that stand in the way of banks’ ability to offer small-dollar credit products, how technology can play a role in offering these products or assessing the creditworthiness of potential borrowers, and how alternative products or services could supplement or complement small-dollar credit offerings.

The American Bankers Association has long called on regulators to remove barriers that impede banks from making small-dollar loans, and earlier this year welcomed guidance from the OCC encouraging banks to make responsible short-term, small-dollar installment loans to help meet the credit needs of their customers. The association has previously called on the FDIC to rescind its 2013 guidance on direct deposit advance services, which imposes requirements on banks that are inconsistent with efficient underwriting standards, and will submit feedback to the bureau in response to today’s RFI.