Search
 

FDIC Updates Payday Lending Guidance

WASHINGTON-The Federal Deposit Insurance Corporation recently published supplementary guidance concerning safety and soundness and compliance issues for examining and supervising state nonmember institutions with payday lending programs. The high-risk nature and strong growth in payday lending led to the guidance. Borrowers often have cash flow problems that lead them to...

By Staff Writer | Updated on October 19, 2004

WASHINGTON-The Federal Deposit Insurance Corporation recently published supplementary guidance concerning safety and soundness and compliance issues for examining and supervising state nonmember institutions with payday lending programs. The high-risk nature and strong growth in payday lending led to the guidance. Borrowers often have cash flow problems that lead them to this type of loan to begin with and payday lenders typically do not evaluate the customers’ ability to repay the loan or their credit history. The guidance also includes expectations for risk management, specifically regarding concentrations, capital, allowance for loan and lease losses, classifications, and protection of consumers. Corrective actions could range from formal to informal enforcement action. In severe cases, the institutions may be ordered to discontinue their payday lending programs. Credit unions have been working to offer low-cost alternatives to payday lenders to help get their members out of what can become a dangerous debt cycle.

Complete your profile to continue reading and get FREE access to CUTimes.com, part of your ALM digital membership.

Your access to unlimited CUTimes.com content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Critical CUTimes.com information including comprehensive product and service provider listings via the Marketplace Directory, CU Careers, resources from industry leaders, webcasts, and breaking news, analysis and more with our informative Newsletters.
  • Exclusive discounts on ALM and CU Times events.
  • Access to other award-winning ALM websites including Law.com and GlobeSt.com.

Already have an account?

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Recommended Stories

Credit Union Times

Join Credit Union Times

Don’t miss crucial strategic and tactical information necessary to run your institution and better serve your members. Join Credit Union Times now!

  • Free unlimited access to Credit Union Times' trusted and independent team of experts for extensive industry news, conference coverage, people features, statistical analysis, and regulation and technology updates.
  • Exclusive discounts on ALM and Credit Union Times events.
  • Access to other award-winning ALM websites including TreasuryandRisk.com and Law.com.

Already have an account? Sign In Now
Join Credit Union Times

Copyright © 2024 ALM Global, LLC. All Rights Reserved.