Financial regulators yesterday urged banks to offer small-dollar loans, anticipating a growing need during the coronavirus pandemic, MorningConsult.com reported. Most banks have pulled back from offering small-dollar products to consumers, citing 2013 guidance from the Federal Deposit Insurance Corp. and Office of the Comptroller of the Currency that discouraged the practice. The agencies and the Federal Reserve Board have discussed issuing new guidance that encourage banks to re-enter the market, and agency staff said that more permanent and detailed guidance is still in the works. In a new interagency statement released yesterday, the latest from bank regulators as they react to the coronavirus crisis, the Fed, FDIC, OCC, National Credit Union Administration and Consumer Financial Protection Bureau reassured banks that they would “favorably consider” banks offering short-term unsecured credit products, which could include open-end lines of credit, closed-end installment loans or appropriately structured single payment loans.
