The Board emphasizes that its examiners will completely review all aspects of a bank’s deposit advance program for conformity with relevant law (like the UDAP provisions of Section 5 regarding the FTC Act). In addition it tips to dangers due to making use of third-party contractors, particularly where fee-sharing or other plans create incentives for improper overuse of DAP loans. Further, it directs State user banking institutions to mitigate dangers through item design and also to implement procedures closely observe vendor that is third-party and results. It doesn’t, but, enforce new measures that are prescriptive the usage of supervisory tools.

The value with this difference just isn’t entirely clear. It may possibly be a timing question just.

The Board may simply be deferring policy-making on the issue to the CFPB because the banks supervised by the Board which offer DAP loans tend to be large enough to be subject to CFPB regulation. The Board may feel its approach comports positively utilizing the allocation of main obligation for customer security dilemmas towards the CFPB beneath the Dodd-Frank Act.

The OCC and also the FDIC, but, each supervise a lot more banks that are underneath the $10 billion limit for entities at the mercy of CFPB regulation that is direct. The Agencies’ action may stem from the want to limit the spread of DAP beyond those supervised banking institutions currently providing products that are such. Regardless of the inspiration, the Agencies’ proposed Supervisory Guidance is an even more use that is assertive of authority compared to Board’s Statement. Continua a leggere →