Agencies release principles for responsible small-dollar loans

May 21, 2020

Federal financial regulators issued principles for responsibly offering small-dollar loans to meet customers' short-term credit needs. According to the interagency principles, responsible small-dollar products generally reflect:

  • A high percentage of customers successfully repaying their small dollar loans in accordance with original loan terms.
  • Repayment terms, pricing, and safeguards that minimize adverse customer outcomes.
  • Repayment outcomes and program structures that enhance borrowers’ financial capabilities.

A March 26 interagency statement encouraged financial institutions to offer responsible small-dollar loans to consumers and small businesses in response to COVID-19.