FDIC Rescinds Guidance on Deposit Advance Services

Posted: Jul 30 2020

The FDIC last week formally rescinded its 2013 guidance on deposit advance products after announcing the move last May. The action removes a key barrier that had discouraged banks from entering or establishing small-dollar credit products that are economically sustainable while meeting the needs of bank customers.

The 2013 guidance established prescriptive supervisory expectations for underwriting, credit risk monitoring and limits on customer usage that caused almost all banks to discontinue those services. The FDIC last May joined the other federal banking agencies in issuing interagency lending principles that encouraged banks and credit unions to offer small dollar loans but conflicted with the 2013 guidance.

To read more, visit: https://www.govinfo.gov/content/pkg/FR-2020-07-24/pdf/2020-15224.pdf