Newsroom
CFPB releases small dollar lending FAQs
The CFPB Tuesday released several new Frequently Asked Questions (FAQs) related to its Small Dollar Lending Rule. The Bureau issued the final rule last month, which includes the rescission of mandatory underwriting requirements – including ability-to-repay (ATR) provisions – from the 2017 payday lending rule.
NAFCU supported removing these requirements, but had called for an expansion of the safe harbor for credit unions' payday alternative loans (PALs), which was not included in the final rule.
The FAQs cover a variety of topics related to:
- covered loans;
- payment transfers; and
- payment notices.
The CFPB also published a Policy Statement on Compliance Aids, explaining the Bureau's approach to compliance aids and has additional resources, including a small entity compliance guide, available.
As the financial regulators encourage financial institutions to offer safe small-dollar lending options to consumers facing financial hardship amid the coronavirus pandemic, the CFPB in May approved a no-action letter (NAL) template to be used by insured depository institutions to apply for a NAL covering their small-dollar credit products.
NAFCU continues to work closely with the CFPB to identify areas of relief for credit unions and will continue to advocate that the agency do more to ensure institutions can meet the urgent needs of members and provide support.