Amends the Truth in Lending Act to introduce a safe harbor for small-dollar credit products.
Provides immunity from civil money penalties and damages for covered entities offering small-dollar products if they comply with specified requirements.
Sets product structure requirements for installment loans and lines of credit, including repayment terms and prohibitions on rollovers.
Requires covered entities to use sound underwriting processes and allows the use of internal or external data sources to assess consumer creditworthiness.
Allows covered entities to offer small-dollar products that do not comply with the safe harbor requirements.
Prohibits balloon payments where no payment can be more than double any other payment required for the product.
Mandates compliance with all disclosure requirements set forth by the Truth in Lending Act for small-dollar credit products.
Prohibits prepayment penalties, overdraft fees, or nonsufficient funds fees in connection with small-dollar credit products.
Requires that amounts made available through small-dollar credit products be disbursed to the consumer’s account within 5 days of approval.
Defines covered entities to include insured depository institutions, insured credit unions, and third parties contracted for related services.
Specifies the meanings of terms such as “appropriate Federal banking agency,” “insured credit union,” and “insured depository institution.”
Defines a “small-dollar credit product” as a loan or line of credit with a value of $3,500 or less.
