The Office of the Comptroller of the Currency ("OCC") reminded supervised banks of the "core principles" for responsible short-term, small-dollar installment lending.

In a Bulletin, the OCC explained that banks have the following obligations for safely offering installment-lending products:

  • to effectively manage risks for all products they offer;
  • to ensure that bank products adhere to applicable laws and regulations; and
  • to ensure that credit products are underwritten based on reasonable policies and practices.

In addition, the bulletin outlined expectations regarding (i) loan amounts and repayment terms, (ii) loan pricing and repayment terms, (iii) analysis of customers' creditworthiness, (iv) marketing and customer disclosures, (v) loan servicing processes, and (vi) reporting of repayment activities.

The OCC stated that it intends to work closely with the Consumer Financial Protection Bureau ("CFPB") to facilitate responsible consumer lending activities, including lending activities covered by the Payday Rule. As previously covered, the CFPB announced in January that it will reconsider the Payday Rule. Acting CFPB Director Mick Mulvaney said that the CFPB "will strive to expand consumer choice," and pledged to "work[] with the OCC and other partners on efforts to promote access and innovation in the consumer credit marketplace."

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