The Federal Deposit Insurance Corp. is soliciting comment on how to encourage small-dollar lending at banks, signaling a course change from guidance it issued five years ago restricting such loans.
The FDIC’s request for information issued Wednesday specifically asks about consumer demand for small-dollar credit, the supply offered by FDIC-insured banks and what the agency can do to help banks “offer responsible, prudently underwritten credit products."
“The bottom line here is we’re trying to make an informed opinion and policy on how to proceed with short-term lending,” FDIC Chairman Jelena McWilliams said in an interview following the announcement. If small-dollar lending is “done by banks, we can regulate them. And we are able to work with the banks on how to ensure the consumer protection protocols are in place and compliant while making sure that the consumers’ needs are met.”
Read more in American Banker.