Interagency LendingPrinciples for Offering Responsible Small-Dollar Loans
For borrowers who experience unexpected circumstances and cannot repay a loan as structured, banks, savings associations and credit unions are encouraged to consider workout strategies designed to help their borrowers repay the principal of the loan while mitigating the need to re-borrow.
On May 20, 2020, the Federal Reserve Board, the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the Office of the Comptroller of the Currency (the "agencies") issued the "Interagency Lending Principles for Offering Responsible Small-Dollar Loans". It provides principles to financial institutions for offering small-dollar loans in a responsible manner to meet their customer's short-term credit needs from temporary cash-flow imbalances, unexpected expenses, or income shortfalls, including during periods of economic stress, natural disasters, or other extraordinary circumstances such as the emergency created by COVID-19.
A March 26 joint agency statement had encouraged banks, savings associations, and credit unions to offer responsible small-dollar loans to consumers and small businesses in response to COVID-19.
The information may be found here: