Bank gets NAL from CFPB using small-dollar template
On November 5, under the CFPB’s revised no-action letter (NAL) policy, the Bureau issued a NAL to a national bank regarding certain small-dollar credit products offered by the bank. As previously covered by InfoBytes, in May, the Bureau approved a template in response to a request by a nonpartisan public policy, research and advocacy group for banks that would assist depository institutions in offering a standardized, small-dollar credit product under $2,500 with a repayment term between 45 days and one year. The bank submitted its application using this template.
Among other things, the NAL notes that the bank’s application includes (i) each of the “13 Guardrail Certifications” described in the template; (ii) a copy of the small-dollar credit product’s terms and conditions the bank intends to provide to consumers; (iii) marketing materials intended to be used to market the product; and (iv) substantially similar consumer benefits and consumer risks as described in the advocacy groups’ template application. A copy of the bank’s application is available here.
Additionally, the Bureau released a Paperwork Reduction Act (PRA) notice, covering research efforts to “identify information that could be disclosed to consumers during the payday loan process to help them make better-informed decisions.”