[Federal Register Volume 83, Number 224 (Tuesday, November 20, 2018)]
[Notices]
[Pages 58566-58568]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-25257]


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FEDERAL DEPOSIT INSURANCE CORPORATION

RIN 3064-ZA04


Request for Information on Small-Dollar Lending

AGENCY: Federal Deposit Insurance Corporation (FDIC).

ACTION: Notice and request for Information.

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SUMMARY: The FDIC is seeking comments and information from interested 
parties on small-dollar lending, including steps that can be taken to 
encourage FDIC-supervised financial institutions (banks) to offer 
small-dollar credit products that are responsive to customers' needs 
and that are underwritten and structured prudently and responsibly.

DATES: Comments must be received by January 22, 2019.

ADDRESSES: You may submit comments, identified by RIN 3064-ZA04, by any 
of the following methods:
     Agency website: https://www.fdic.gov/regulations/laws/federal/. Follow the instructions for submitting comments on the Agency 
website.
     Email: [email protected]. Include the RIN 3064-ZA04 in the 
subject line of the message.
     Mail: Robert E. Feldman, Executive Secretary, Attention: 
Comments, Federal Deposit Insurance Corporation, 550 17th Street NW, 
Washington, DC 20429.
     Hand Delivery: Comments may be hand-delivered to the guard 
station at the rear of the 550 17th Street NW, building (located on F 
Street) on business days between 7:00 a.m. and 5:00 p.m.
    Public Inspection: All comments received must include the agency 
name and RIN for this rulemaking. All comments received will be posted 
without change to https://www.fdic.gov/regulations/laws/federal/--
including any personal information provided--for public inspection. 
Paper copies of public comments may be ordered from the FDIC Public 
Information Center, 3501 North Fairfax Drive, Room E-1002,

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Arlington, VA 22226 by telephone at (877) 275-3342 or (703) 562-2200.

FOR FURTHER INFORMATION CONTACT: Paul Robin, Section Chief, (202) 898-
6818, [email protected].

SUPPLEMENTARY INFORMATION: The FDIC is responsible for maintaining 
stability and public confidence in the nation's financial system by 
insuring deposits, examining and supervising financial institutions for 
safety and soundness and consumer protection, making large and complex 
financial institutions resolvable, and managing receiverships. As 
discussed further below, the FDIC is soliciting public comments on 
issues related to small-dollar lending by banks. Specifically, we are 
requesting information on the consumer demand for small-dollar credit 
products, the supply of small-dollar credit products currently offered 
by banks, and whether there are steps the FDIC could take to better 
enable banks to provide such products to consumers to meet demand.

Overview of Request for Information

    The Federal Deposit Insurance Corporation (FDIC) is issuing this 
request for information (RFI) to seek public input on steps the FDIC 
could take to encourage FDIC-supervised institutions to offer 
responsible, prudently underwritten small-dollar credit products that 
are economically viable and address the credit needs of bank customers. 
This effort is consistent with the FDIC's commitment to increase 
transparency, improve efficiency, support innovation, and provide 
opportunities for public feedback on issues affecting FDIC-supervised 
institutions and their customers.
    The FDIC recognizes the important role small-dollar credit products 
can play, as part of the spectrum of credit and savings products 
offered by banks, in helping consumers meet the need for credit for 
purposes such as addressing cash-flow imbalances, unexpected expenses, 
or income volatility. Recent research from the FDIC indicates that 20 
percent of U.S. households reported that their income varied 
``somewhat'' or ``a lot'' from month-to-month.\1\ Moreover, according 
to research from the Federal Reserve, if faced with a hypothetical $400 
expense, 4 in 10 U.S. adults in 2017 would borrow, sell something, or 
not be able to pay.\2\
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    \1\ ``2017 FDIC National Survey of Unbanked and Underbanked 
Households,'' Federal Deposit Insurance Corporation, October 2018.
    \2\ ``Report on the Economic Well Being of U.S. Households in 
2017,'' Board of Governors of the Federal Reserve System, May 2018.
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    Given the unique role banks play in the communities they serve and 
the benefits to consumers of having a relationship with an insured 
financial institution, banks are well-positioned to address the credit 
needs of their customers in a responsible manner. While some banks 
currently offer small-dollar credit products, there may be additional 
opportunities for banks to address unmet demand for consumer credit in 
their communities. For example, research from the FDIC suggests that in 
2017, 14.8 million or nearly 13 percent of U.S. households may have had 
unmet demand for small-dollar credit from banks. A majority of these 
households reported staying current on bills in the prior year. 
Although the vast majority (nearly 9 in 10) of these households had a 
bank account, fewer than one in three applied for credit from a 
bank.\3\ Some of these households may present opportunities for banks 
to extend credit in the form of small-dollar loans.
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    \3\ ``2017 FDIC National Survey of Unbanked and Underbanked 
Households,'' Federal Deposit Insurance Corporation, October 2018.
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    Accordingly, the FDIC invites public comments on the full spectrum 
of issues related to the role banks can play in offering small-dollar 
credit, obstacles--regulatory and non-regulatory--that banks currently 
encounter in offering such credit, and whether there are steps the FDIC 
could take to enable banks to better serve this market.

Suggested Topics for Commenters

    The FDIC encourages comments from all interested members of the 
public, including but not limited to insured depository institutions, 
other financial institutions or companies, individual depositors and 
consumers, consumer groups, trade associations, and other members of 
the financial services industry. Please be as specific as possible to 
allow the FDIC to evaluate comments more effectively. In particular, 
the FDIC requests input on the following more specific topics and 
questions:

Consumer Demand

    1. To what extent is there an unmet consumer demand for small-
dollar credit products offered by banks?
    2. To what extent do banks currently offer small-dollar credit 
products to meet consumer demand?
    3. To what extent and in what ways do entities outside the banking 
sector currently satisfy the consumer demand for small-dollar credit 
products?
    4. What data, information, or other factors should the FDIC 
consider in assessing the consumer demand for small-dollar credit 
products?

Benefits and Risks

    5. What are the potential benefits and risks to banks associated 
with offering responsible, prudently underwritten small-dollar credit 
products?
    6. What are the potential benefits and risks to consumers 
associated with bank-offered small-dollar credit products?
    7. What are the key ways that banks offering small-dollar loan 
products should manage or mitigate risks for banks and risks for 
consumers?
    8. What are the potential benefits and risks related to banks 
partnering with third parties to offer small-dollar credit?
    9. What steps could the FDIC take, consistent with its statutory 
authority, to encourage banks to develop and offer responsible, 
prudently underwritten small-dollar credit products?

Challenges

    10. Are there any legal, regulatory, or supervisory factors that 
prevent, restrict, discourage, or disincentivize banks from offering 
small-dollar credit products? If so, please explain.
    11. Are there any operational, economic, marketplace, or other 
factors that prevent, restrict, discourage, or disincentivize banks 
from offering small-dollar credit products? If so, please explain.
    12. What factors may discourage consumers from seeking responsible, 
prudently underwritten small-dollar credit products offered by banks?

Product Features

    13. Are there specific product features or characteristics of 
small-dollar loan products that are key to meeting the credit needs of 
consumers while maintaining prudent underwriting?
    14. Are there specific product features or characteristics that are 
key to ensuring the economic viability to a bank of responsible, 
prudently underwritten small-dollar credit products?

Innovation

    15. How can technology improve the ability of banks to offer 
responsible, prudently underwritten small-dollar loan products in a 
sustainable and cost-effective manner? Please specify the technology or 
technologies and the use case(s).
    16. Are there innovations that might enable banks to better assess 
the creditworthiness of potential small-dollar loan borrowers with 
limited or no credit records with a nationwide credit reporting agency?
    17. What role should the FDIC play, if any, in supporting 
innovations that enhance banks' abilities to offer

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responsible, prudently underwritten small-dollar loans? Are there 
specific barriers that prevent banks from implementing such 
technologies or innovations?
    18. How can technology be leveraged to improve consumers' 
experiences and reduce potential risks to consumers associated with 
small-dollar credit products?

Alternatives

    19. What other products and services that supplement or complement 
small-dollar credit offerings should banks consider? Are there other 
ways that banks can help consumers address cash-flow imbalances, 
unexpected expenses, or income volatility besides small-dollar credit 
products?

Other

    20. Are there any distinguishing characteristics of particular 
institutions, such as a bank's size, complexity, or business model, 
that the FDIC should consider, and if so how?
    21. Please provide any other comments or information that would be 
useful for the FDIC to consider.

    Dated at Washington, DC, on November 15, 2018.

Federal Deposit Insurance Corporation.
Robert E. Feldman,
Executive Secretary.
[FR Doc. 2018-25257 Filed 11-19-18; 8:45 am]
 BILLING CODE P