OCC provides banking institutions light that is green take on payday loan providers
Any office for the Comptroller regarding the Currency is shaking up the realm of short-term financing by motivating banks to supply high-interest price loans to subprime borrowers as an option to payday loan providers.
In a significant break from previous regulators, Comptroller Joseph Otting stated Wednesday which he wishes 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.” This new OCC directions could start a $90 billion market to institutions that are financial.
“this system is a car to help individuals get right back into conventional banking and acquire them off of high-cost economic solutions services and products of check-cashing and payday lending, by having a view toward getting them to the mainstream of monetary tasks where they could be eligible for credit cards,” Otting said for a meeting call with reporters.
