Any office for the Comptroller regarding the Currency is shaking up the realm of short-term financing by motivating banks to provide high-interest price loans to subprime borrowers as an alternative to payday loan providers.
In a significant break from previous regulators, Comptroller Joseph Otting stated Wednesday he desires banking institutions to originate loans of $300 to $5,000 to borrowers with FICO ratings of 680 or below, with few other parameters beyond “sound underwriting.” The latest OCC directions could start a $90 billion market to institutions that are financial.
“the product is a car to help individuals get right back into main-stream banking to get them off of high-cost economic services items of check-cashing and payday financing, having a view toward getting them to the main-stream of economic activities where they could be eligible for credit cards,” Otting said on a meeting call with reporters.
“we myself think banking institutions provides that in a safer, noise more economically-efficient way.”
The OCC issued a bulletin making clear its assistance with short-term, small-dollar installment loans, but stated the agency would not conduct research ahead of the launch. Continue reading OCC offers banking institutions green light to contend with payday loan providers