FDIC and OCC Issue Final Guidance on Deposit Advance Loans
By: David I. Monteiro, Michael A. Cumming
Recently, the Federal Deposit Insurance Corporation (“FDIC”) and the Office of the Comptroller of the Currency (“OCC”) issued final supervisory guidance (FDIC guidance, OCC guidance) for financial institutions that offer so-called “deposit advance products.” By using these products, borrowers generally receive small-dollar, short-term loans and promise to repay them from the proceeds of their next paycheck (or benefit disbursement), which are direct-deposited into the borrower’s bank account. Notably, the regulators’ guidance applies to deposit advance products “regardless of how the extension of credit is structured” (e.g., as a loan or a line of credit). Read More