Comptroller Curry Calls On Banks To Offer Payday Loan Alternatives

Payday Lending OCC Installment Loans

On April 1, Comptroller Thomas Curry delivered remarks in which he urged banks to offer alternatives to “high cost payday loans.” The Comptroller defended his agency’s guidance on deposit advance products and stated that “properly managed small-dollar loan programs do not exhibit the same level of risks [the OCC] identified with deposit advance products, and that such loans can be made available to consumers.” He added that many of the risks identified with regard to deposit advance guidance, including the product’s short-term balloon payment feature, were specific to that product. He encouraged banks to offer “responsible” small-dollar loan programs comprised of products with reasonable terms, and to report payment information for such products to credit bureaus. In addition to helping consumers, the comptroller believes such programs (i) can be offered at an incremental cost to banks; (ii) can help build banks’ reputations and expand existing customer relationships; and (iii) can potentially be eligible for positive CRA consideration. The remarks did not provide specific guidance on the pricing and other small dollar loan terms that the OCC would consider appropriate.