Consumer Financial Protection Bureau issues no action letter to facilitate consumer access to small-dollar loans

The Consumer Financial Protection Bureau (Bureau) granted a no-action letter (NAL) to Bank of America, N.A. regarding certain small-dollar credit products.  Issued under the updated NAL Policy from last year, NALs provide increased regulatory certainty that the Bureau will not bring a supervisory or enforcement action against a company for providing a product or service under certain facts and circumstances.  Bank of America’s NAL application is based on the NAL Template issued by the Bureau on May 22, 2020 in response to an application from the Bank Policy Institute.  The Bureau approved the NAL Template to further competition in the small-dollar lending space, which fosters access to credit while including important protections for consumers who seek small-dollar loan products.

The Bureau today also submitted a Paperwork Reduction Act (PRA) notice to the Office of the Federal Register for publication.  The PRA notice relates to its research efforts to identify information that could be disclosed to consumers during the payday loan process to help them make better-informed decisions.  The testing of different consumer disclosures supports the Bureau’s commitment to ensuring that consumers have the information they need to understand the small dollar products available to them so they can make the choices that are best for them and their personal circumstances.

A copy of Bank of America’s NAL application can be found here: https://files.consumerfinance.gov/f/documents/cfpb_bank-of-america_no-action-letter-request_2020-11.pdf.

A copy of the NAL issued to Bank of America can be found here: https://files.consumerfinance.gov/f/documents/cfpb_bank-of-america_no-action-letter_2020-11.pdf.

To read the Paperwork Reduction Act notice click here: https://files.consumerfinance.gov/f/documents/cfpb_payday-loan-disclosure-testing_notice_2020-11.pdf.