Office of the Comptroller of the Currency will authorize banks to compete with payday lenders

This NY Times article by Stacy Cowley and Emily Flitter explains that 

A federal regulator on Wednesday encouraged banks to offer small, short-term loans to people in need of emergency cash, the Trump administration’s latest relaxation of banking regulations and a rare moment of common ground with consumer groups that oppose payday lending. The Office of the Comptroller of the Currency, which regulates national banks, said it will start allowing banks to make small loans — typically in the range of $300 to $5,000 — outside of their standard underwriting processes. * * * The Pew Charitable Trusts, which has fiercely opposed payday lending, praised the change of heart. “If banks begin offering these loans according to strong safety standards, it could boost financial inclusion and be a game-changer for the millions of Americans who use high-cost loans today,” said Nick Bourke, the director of Pew’s consumer finance research. But some major obstacles remain. The biggest is a new rule from the Consumer Financial Protection Bureau, scheduled to take effect in August 2019, that places strict limits on loans with a term of 45 days or less. Those rules would cover the kind of deposit advance loans banks used to offer. Mick Mulvaney, the acting director of the bureau, has said he wants to reconsider the rule, but he has not yet began the formal process needed to alter or eliminate it.

Also take a look at Would a Bank Payday Loan Be Any Safer? by Liz Weston at Nerdwallet. For other coverage go herehere, and here.

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