The FDIC, Board of Governors of the Federal Reserve System (FRB), Office of the Comptroller of the Currency (OCC), and National Credit Union Administration (NCUA) (collectively, the "agencies") recognize the role small–dollar loans can play in helping borrowers meet credit needs due to cash-flow imbalances, unexpected expenses, or temporary income shortfalls. The agencies are issuing guidance principles (the "interagency guidance") to clarify regulatory expectations in a manner that encourages financial institutions to offer responsible small–dollar loans.
Statement of Applicability to Institutions Under $1 Billion in Total Assets:
This Financial Institution Letter (FIL) applies to all FDIC–supervised institutions.
In November 2018, the FDIC issued a request for information on steps the FDIC could take to encourage FDIC-supervised institutions to offer responsible small–dollar credit products (FIL–71–2018). Commenters provided a number of suggestions, and many urged the FDIC to provide guidance to banks to enable them to better serve this market.
- The agencies recognize that banks, savings associations, and credit unions (collectively, "financial institutions") can play an important role in providing small–dollar loans safely and responsibly.
While the current regulatory framework allows financial institutions to offer responsible small–dollar loans — and some financial institutions do provide these products — many borrowers' credit needs remain unmet. Financial institutions are well suited to meet these credit needs through responsible small–dollar programs.
- The agencies have previously adopted separate (and different) guidance regarding small–dollar loans. By adopting the interagency guidance, the agencies are providing uniform principles for all financial institutions. In light of this approach, the FDIC is rescinding and replacing its 2007 guidelines (FIL-50-2007) and its 2013 guidance (PR-105-2013) with the interagency guidance. In addition, the FDIC will make technical and conforming changes to its 2015 guidelines (FIL-52-2015).
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