The Consumer Bankers Association (CBA) maintains actions by federal regulators unfavorably impact small-dollar lending consumers by forcing them to payday lenders and other less regulated sources when in need.
CBA officials said the input stems from the Federal Deposit Insurance Corporation’s (FDIC) request for information on its 2013 small-dollar guidance.
“A tremendous amount of attention has been rightfully given to the hardships furloughed federal employees are facing, and banks have stepped up to the plate,” Richard Hunt, CBA president and CEO, said. “But, for millions of Americans, the need for short-term assistance to meet emergency expenses existed before the shutdown and will exist after the government reopens. Instead of turning to less regulated, more costly lenders, families should be able to rely on their bank for assistance.”
Hunt said banks are ready to help, but noted existing rules and guidance from federal regulators stand in the way.
The CBA is urging regulators to adopt guidelines based on sound evidentiary conclusions, especially concerning bank-offered products. It is also encouraging regulators to provide for reasonable consumer protections as well as ease of administrative burdens to allow greater reach to the unbanked and underbanked. It also urges the entities to provide an option for banks to offer small-dollar loans as a line of credit and offer banks a clear and easily applied standard that consumers will understand.