Trump-appointed regulators gave the industry the green light to offer installment loans during the pandemic. But with concerns that the light could turn red in 2021, bankers remain extra cautious.
The agency has proposed letting firms seek specific guidance, which can be applied to other institutions. But consumer groups worry the plan circumvents formal rulemaking.
A budget item establishing a new agency to protect consumers from predatory lenders has been put on hold as state officials deal with the coronavirus response and other priorities. But it could be revived in legislative talks later this summer.
The acting head of the agency says it cannot continue relying on web-based exams put in place during the coronavirus and will start sending staff into banks.
Comptroller of the Currency Joseph Otting’s regulation reforming the Community Reinvestment Act lacks performance metrics criticized in an earlier proposal. But neither the FDIC nor the Fed is supporting the final plan.
The final regulation will significantly revise a December proposal, responding to concerns from stakeholders. Meanwhile, in a surprising move, the regulator who had championed the reforms is expected to resign this week.
Banks tend to pull back in times of crisis by tightening credit and focusing on collections efforts. But consumers, and not returns, must be the focus during the coronavirus pandemic.
