Regulators Encourage Banks to Make Small Dollar Loans

The FDIC and other regulators announced in a joint statement yesterday that banks should re-enter the business of making short term, small dollar loans to consumers; by making this announcement regulators hope to steer consumers away from expensive payday loans; the federal agencies said that small dollar loans can help consumers “meet their needs for credit due to temporary cash-flow imbalances, unexpected expenses, or income shortfalls during periods of economic stress or disaster recoveries”; the OCC has been encouraging banks to offer small dollar loans since 2018; some banks, such as US Bank, already have a robust small dollar loan program in place, offering loans for three months at a 71% effective annual rate; in response to the coronavirus US Bank has announced that it has halved the fees on this product to $6 for every $100 borrowed. The Wall Street Journal

  • Emily Donato

    With efforts in many different areas of the team, she helps manage, organize and execute digital and event content. She works with webinars, podcasts, social media along with managing the hundreds of speakers that attend our conferences. Emily was a part of the Zimmerman Advertising Program at the University of South Florida. She graduated in 2019 receiving a Bachelor of Science in Business Advertising.