As CFPB closes home on payday, OCC starts one for deposit advance

As CFPB closes home on payday, OCC starts one for deposit advance

WASHINGTON — The world of short-term financing had been shaken up Thursday as one regulator released a rule breaking down on payday advances while another caused it to be easier for banking institutions to supply a product that is alternative.

The buyer Financial Protection Bureau finalized its long-awaited guideline to rein in short-term, high-interest loans which can be typically due in 2 to a month, needing loan providers to do an ability-to-repay test to make sure borrowers are able to afford such services and products.

Significantly less than an hour or so later on, any office regarding the Comptroller regarding the Currency amazed the monetary solutions globe by simply making a unique move—rescinding guidance that managed to get more challenging for banking institutions to provide a payday-like product called deposit advance.

The moves that are dueling signify the CFPB had been shutting a home within one area, even though the OCC launched a unique for nationwide banking institutions.

The OCC billed its choice as one meant to avoid replication because of the CFPB’s efforts. Continue reading “As CFPB closes home on payday, OCC starts one for deposit advance”