Repeated attempts by online payday lenders to collect payments via direct debit can lead to unanticipated consequences for consumers’ bank accounts, according to a report issued by the Consumer Financial Protection Bureau today.
Browsing: Payday lending
The Consumer Financial Protection Bureau is considering applying “ability-to-repay” standards to small dollar loans, which would require lenders to verify a prospective borrower’s income, major financial obligations and borrowing history before making a loan, Director Richard Cordray said today.
A large majority of banks provide small dollar loans effectively (with low charge-offs) and have the capacity to expand their small dollar lending, were market and regulatory conditions to allow for it, according to an ABA survey of senior bank officers.
The FDIC today updated its 2005 guidance on payday lending by banks to emphasize that the guidance does not apply to banks providing bank services to payday lenders. The guidance applies to payday loan-style products made directly to consumers by banks. “Financial institutions that can properly manage customer relationships and effectively mitigate risks are neither
More research is needed on payday borrower habits before any regulation curbing payday lending is adopted, say researchers at the Federal Reserve Bank of New York. The authors examined criticisms of payday lending that are used to justify reform and said that most did not hold up to scrutiny. Research is split, for instance, on