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Are financial institutions encouraged to offer responsible small-dollar loans to consumers and small businesses affected by COVID-19?
Yes. On March 26, 2020, the FDIC, FRB, OCC, CFPB, and NCUA issued a joint statement encouraging financial institutions to offer responsible small-dollar loans to consumers and small businesses in response to COVID-19. The statement recognizes that such loans can play an important role in meeting customers' credit needs because of temporary cash-flow imbalances, unexpected expenses, or income disruptions during periods of economic stress or disaster recoveries. Loans should be offered in a manner that provides fair treatment of consumers, complies with applicable laws and regulations, and is consistent with safe and sound practices. The statement noted the agencies were working jointly on future guidance and lending
Joint Statement Encouraging Responsible Small-Dollar Lending in Response to COVID-19 https://www.fdic.gov/news/news/press/2020/pr20039a.pdf
On May 20, 2020, the agencies issued “Interagency Lending Principles for Offering Responsible Small-Dollar Loans” to encourage financial institutions to offer responsible small-dollar loans to customers for both consumer and small business purposes.
Interagency Guidance for Responsible Small-Dollar Loans, May 20, 2020 FDIC FIL-58-2020 https://www.fdic.gov/news/financialinstitution- letters/2020/fil20058.html
Interagency Lending Principles for Offering Responsible Small-Dollar Loans https://www.fdic.gov/news/press-releases/2020/pr20061a.pdf