The Consumer Financial Protection Bureau (CFPB) issued a final rule on July 7, 2020 on small dollar lending. The final rule rescinds the mandatory underwriting provisions of the previous rule issued by the CFPB in 2017. According to the press release issued by the CFPB, rescinding the mandatory underwriting provisions of the 2017 rule “ensures that consumers have access to credit and competition in states that have decided to allow their residents to use such products, subject to state-law limitations.” The entire press release issued by the CFPB, along with a link to the final rule, can be accessed here. […]
CFPB Issues Final Rule on Small Dollar Lending
Why small dollar credit is not underwritten and why policy makers can’t force it.
When you compare traditional credit and short-term credit options, you will find very few things in common. Other than both having terms of payment, everything else is very different, including the regulations that control them. One of the most significant contrasts between the two types of credit is what is involved in the credit approval process. One financial CEO even joked of short-term credit approval requirements, “All you need is a pay stub, a bank account and a heartbeat.” This general lack of requirements and underwriting has brought waves of scrutiny in recent years about whether short-term, high cost loans […]
International Jurisdictions looking at U.S. policy as small-dollar credit expands globally.
Small-dollar, short-term lending continues to expand globally as access to traditional consumer credit tightens. Developed countries are noticing rapid expansions in their small-dollar lending industries, and many are looking for solutions on how to regulate this sector of consumer finance. Consumer advocates are demanding government regulation and are driving associated regulatory bodies to identify best practices for regulating this sector. Many of these regulatory bodies are looking to the United States as one of the oldest and most diversely regulated small-dollar lending marketplaces. The U.S. has 37 states with legal, regulated small-dollar lending. These jurisdictions each have unique regulations and […]
Veritec Releases Response to Proposed CFPB Rules
FOR IMMEDIATE RELEASE Jacksonville, Fla., October 26, 2016 – Veritec Solutions LLC, the industry leader in real-time regulatory solutions, submitted comments on October 6th in response to the Notice of Proposed Rulemaking on Payday, Vehicle Title, and Certain High-Cost Installment Loans released by the Consumer Financial Protection Bureau (CFPB). For over 15 years, Veritec has managed regulatory database programs spanning 14 states. Our expertise in the industry stems from our extensive experience in the payday, vehicle title, and installment loan sector, as well as the strong relationships developed with regulators, lenders, and consumers. Veritec’s response includes the following topics in […]