Dem AGs Want Consumer Protections On Bank Small-Dollar Loans

Democratic state attorneys general said the Federal Deposit Insurance Corp. should require banks to review a borrower’s ability to repay short-term, small-dollar loans if the regulator moves forward with allowing such lending to return to banks.

The 14 state attorneys general said in their Jan. 22 letter that they “welcomed” the FDIC’s November request for information on allowing state-chartered banks to engage in short-term, small-dollar lending. Doing so could provide an alternative to payday loans, which can carry triple-digit interest rates and trap borrowers in debt cycles.

But the attorneys general said that the FDIC should put in place protections ...