New Joint Bank Regulators’ Guidance Not an Excuse for Banks to Return to Issuing Payday Loans
Around a decade ago, banks’ “deposit advance” products put borrowers in an average of 19 loans per year at more than 200% annual interest Important FDIC consumer protections repealed WASHINGTON, D.C. – Today, four banking regulators jointly issued new small dollar lending guidance that lacks the explicit consumer protections it should have. At the same time, it does require that loans be responsible, fair, and safe and sound, so banks would be wrong to use it as cover to once again issue payday loans or other high-interest credit. The guidance also explicitly advises against loans that put