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Yesterday’s statement notes that the current regulatory framework authorizes banks to offer small-dollar loans through a variety of structures – including open-end lines of credit, closed-end installment loans, or appropriately structured single-payment loans – subject to safety and soundness standards and consumer protection laws.  The statement does not clarify what features make a small dollar loan “responsible” in the view of the agencies, but the OCC issued guidance in 2018 addressing that issue for national banks and federal savings banks.

Financial institutions may, but are not required to, consult with their primary federal regulator about small-dollar loan products offered to affected customers.  The statement indicates that the agencies are working on future guidance and lending principles for responsible small-dollar lending “in more normalized times.”

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