Consumer Lending

Laws and Regulations

Key laws and regulations that pertain to FDIC-supervised institutions; note that other laws and regulations also may apply.

• Appendix A to Part 364 — Interagency Guidelines Establishing Standards for Safety and Soundness provides operational and managerial standards for safety and soundness to include asset quality and asset growth
• Section 337.2 — Standby Letters of Credit discusses the calculation of legal lending limitations, including loans to any one borrower, loans to affiliates of the bank, or aggregate loans
• Section 337.3 and Federal Reserve Board Regulation O address extensions of credit from an institution to its executive officers, directors, and principal shareholders
• Part 347 — International Banking discusses requirements for institutions to engage in foreign financial activities
• Federal Reserve Board Regulation W restricts certain transactions between banks and their affiliates

Supervisory Resources

Frequently asked questions, advisories, statements of policy, and other information issued by the FDIC alone, or on an interagency basis, provided to promote safe-and-sound operations.

• Risk Management Manual of Examination Policies
  • Section 3.1 — Asset Quality describes areas of consideration for assigning the asset quality rating and defines each rating
  • Section 3.2 — Loans describes the review process for evaluating lending policies and credit administration practices, as well as their effectiveness to maintain loan quality and minimize loss
  • Section 3.8 — Off-balance Sheet Activities describes the review process for items such as loan commitments, letters of credit, and revolving facilities
• The Uniform Retail Credit Classification and Account Management Policy establishes standards to measure retail credit quality based on the repayment performance of individual borrowers
• Interagency Guidance for Responsible Small-Dollar Loans encourages financial institutions to offer these credit products in a cost-effective, safe-and-sound manner
• Joint Guidance on Overdraft Protection Programs promotes responsible disclosure and administration of overdraft protection services
• Credit Card Lending communicates information about prudent practices for account management, risk management, and loss allowance practices
• Student Loans
  • Guidance on Private Student Loans with Graduated Repayment Terms at Origination addresses underwriting and communicating the timing and the amount of payments to facilitate a borrower’s understanding of the loan’s terms and features
  • Banking Agencies Encourage Financial Institutions to Work with Student Loan Borrowers Experiencing Financial Difficulties promotes the use of workout arrangements for private student loans whenever workout arrangements are economically feasible and appropriate
• Subprime Loans
  • FDIC’s Supervisory Policy on Predatory Lending describes characteristics of predatory lending and reaffirms that such activities are inconsistent with safe-and-sound lending
  • Interagency Guidance on Subprime Lending defines the activity and discusses board-approved policies and internal controls to identify, measure, monitor, and control risk
  • Expanded Guidance for Subprime Lending Programs discusses various issues relating to subprime lending, including the ALLL, regulatory capital, examination review of subprime activities, classification of risk, and documentation for re-aging, renewing, or extending delinquent accounts
• Working with Borrowers
  • Interagency Statement on Meeting the Needs of Creditworthy Borrowers provides a supervisory perspective on providing credit to businesses, consumers, and other creditworthy borrowers
  • Guidance Addressing Certain Issues Related to Troubled Debt Restructurings provides insight into the accounting treatment and regulatory credit risk grade or classification of commercial and residential real estate loans that have undergone troubled debt restructurings
• Consumer Lending Resources for Compliance Officers

Other Resources

Supplemental information related to safe-and-sound banking operations.

• FDIC’s Supervisory Insights — Winter 2017 article, “Underwriting Trends and Other Highlights from the FDIC’s Credit and Consumer Products/Services Survey”