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Revisiting the way banks, credit unions and nonbank lenders operate (and collaborate) will offer choices, protections and a path to greater financial security.
February 18 -
Recreating this industry involves regulation that more effectively aligns the interests of lenders and borrowers, consumer education and outreach and market-driven solutions.
February 21
Recent columns in American Banker have discussed important questions about affordable small dollar credit. Consideration of these issues will be most productive when informed by the best available data. Consequently, the Federal Deposit Insurance Corp. would like to clarify some of the FDIC data cited in those articles.
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At the same time, other FDIC survey results show that a relatively high proportion of households that use credit products from alternative financial service providers (about 1 in 5) did so because they perceived that "banks don't make small dollar loans." Taken together, the findings from these FDIC surveys suggest a market opportunity for financial institutions to get the word out to consumers that they offer affordable small-dollar loan products.
The FDIC has long encouraged banks to offer low-cost, transparent, small dollar loan products. The FDIC continues to believe that banks can offer small dollar loans that are both cost-effective and responsive to consumers' needs. An objective review of the data lends support to this position.
Andrew Gray is the Deputy to the Chairman for Communications at the FDIC.