Small-dollar lending

Trump-appointed regulators gave the industry the green light to offer installment loans during the pandemic. But with concerns that the light could turn red in 2021, bankers remain extra cautious.

Consumers now have more control over their own financial decisions and loan options.

Consumers now have more control over their own financial decisions and loan options.

An interagency notice meant to encourage lenders to offer small consumer loans also provides federal agencies too much say on what constitutes “reasonable” pricing.

The templates are meant to make it easier to obtain agency approval for small-dollar loan products and to accommodate mortgage servicers that want to provide online loss mitigation options.

The comptroller of the currency, who is stepping down after two and a half years on the job, ruffled feathers and won some fans in pushing through CRA reform, cutting costs and trying to reshape the agency’s examiner culture.

Four federal agencies offered guidance Wednesday on how to offer products that compete against payday loans without incurring Washington's wrath. The announcement could spark the rebirth of deposit advances, which were regulated out of existence during the Obama administration.

Some bankers, economists, policy experts and even Mark Cuban say that creative uses of overdraft programs could be lifelines for consumers and businesses whose finances have been upended by the coronavirus crisis.

Banks, which previously shunned unsecured small-dollar lending, are now embracing the product because of the outbreak. It's just a matter of whether the shift is permanent.

The $5.9 billion-asset Liberty Bank in Middletown had set aside $5 million to make small-dollar loans to customers affected by the coronavirus pandemic.