Newsroom

The CFPB last week approved a no-action letter (NAL) for Bank of America related to certain small-dollar credit products. The bureau earlier this year released an NAL template for small-dollar lenders – as well as one for mortgage servicers – to assist entities looking to provide consumers with relief amid the coronavirus pandemic.

Bank of America's product is modeled after the Bank Policy Institute's, which was the first to apply for the NAL template, and is a small-dollar loan with lower ability-to-repay (APR) provisions and reduced or waived fees to incentivize depository institutions to reenter the small-dollar lending market.

Last year, the bureau issued the NAL Policy, Trial Disclosure Program Policy, and Compliance Assistance Sandbox (CAS) Policy. NAFCU is supportive of the bureau's efforts to promote innovation and facilitate compliance at financial institutions and will keep credit unions informed of additional templates that could enhance their operations.

In addition to approving the NAL, the bureau announced a Paperwork Reduction Act (PRA) notice, which details the bureau's testing of new consumer disclosures for payday loans to "inform the decision-making process around whether to move forward with a rulemaking related to payday loan disclosures."

The CFPB's payday lending rule was finalized in July and did not expand the NCUA's payday alternative loans (PALs) safe harbor to the new PALs II program.

NAFCU continues to work closely with the CFPB to identify areas of relief for credit unions and will continue to advocate that the agency do more to ensure institutions can meet the urgent needs of members and provide support.