Affordable Small-Dollar Loan Products Final Guidelines

Highlights: 
 

• Small-dollar loans are in strong demand. The goal of a small-dollar loan program is to enable insured institutions to better serve an underserved and potentially profitable market, while helping consumers avoid, or transition away from, reliance on high-cost debt.
• The guidelines encourage insured institutions to offer small-dollar loan products that have affordable, reasonable interest rates with no or low fees and payments that reduce the principal balance of the loan.
• As part of their programs, institutions may consider offering financial education and a savings component in order for borrowers to reduce their reliance on high-cost, short-term credit.
• During a Community Reinvestment Act (CRA) examination, FDIC examiners may favorably consider small-dollar loan programs when evaluating the lending performance of small, intermediate-small, and large institutions. A small-dollar loan program may be viewed as uniquely responsive in helping to meet the credit needs of a community.

Distribution: 
FDIC-Supervised Banks (Commercial and Savings)

Suggested Routing: 
Chief Executive Officer 
Chief Loan Officer 
Chief Compliance Officer 
CRA Officer 
Chief Information Technology Officer

• Interagency Proposed Statement on Subprime Mortgage Lending 
  https://www.fdic.gov/news/inactive-financial-institution-letters/2007/fil07026.html 
• Expanded Guidance for Subprime Lending Programs 
  http://www.fdic.gov/news/financial-institution-letters/2001/fil0109.html 
• Questions and Answers on the Community Reinvestment Act 
  http://www.ffiec.gov/cra/pdf/qa01.pdf - PDF 285k ( PDF Help )
• Joint Guidance on Overdraft Protection Programs 
  http://www.fdic.gov/news/financial-institution-letters/2005/fil1105.html 
• Regulation E, 12 C.F.R. .205.10(e) 
  http://www.fdic.gov/regulations/laws/rules/6500-3100.html#6500205.10 

Note: 
FDIC financial institution letters (FILs) may be accessed from the FDIC's Web site at www.fdic.gov/news/financial-institution-letters/2007/index.html .

To receive FILs electronically, visit http://www.fdic.gov/about/subscriptions/fil.html .

Paper copies of FDIC financial institution letters may be obtained via the FDIC's Public Information Center (1-877- 275-3342 or 703-562-2200).