Payments News

Regulation

Banks Urged to Issue More Small-Dollar Loans in Response to Outbreak

“Banks should re-enter the business of offering short-term, small-dollar loans to cash strapped-customers in light of the outbreak of the coronavirus , a group of regulators said on Thursday. The move, announced in a joint statement of the Federal Deposit Insurance Corp. and a group of other regulators, marks an effort to revive a riskier lending sector that dried up in the years after the 2008 financial crisis. In encouraging financial firms to move back into this market, regulators say they hope to steer consumers away from more-predatory, payday forms of lending.”