On March 26, 2020, five federal agencies (the OCC, FDIC, Federal Reserve, CFPB, and National Credit Union Administration (NCUA)) issued brief joint guidance to “specifically encourage” financial institutions to offer “responsible small-dollar loans” to both consumers and small businesses during the COVID-19 crisis. This guidance contains troubling language that could be read to permit banks to make payday loans. Banks should not read it that way and should stay out of the business of payday lending.
