The CFPB issued a no-action letter to Bank of America saying that the agency will never simply simply take enforcement action from the bank regarding the a small-dollar financing system. Particularly, the CFPB claimed so it will never act under Sections 1031 (“Prohibiting Unfair, Deceptive, or Abusive Acts or Practices”) and 1036 (“Prohibited Acts”) of Dodd-Frank.
In accordance with the Bank of America no-action letter request, the lender’s small-dollar credit item (“Balance Assist”) is organized being a fixed-term, amortizing small-dollar installment loan become repaid over 3 months. The total amount Assist system would provide loans in increments of $100 up to $500, with a $5 flat fee that is administrative whatever the quantity lent, sufficient reason for hardly any other administrative costs charged. Bank of America specified that the total amount Assist item is provided simply to customers with Bank of America accounts that are checking inflows surpassing a predetermined threshold. Further, the financial institution will perform credit report on possible borrowers and that can reject people that have a credit history that is poor.
The CFPB’s letter provides that the no-action place can be obtained and then Bank of America and never to virtually any other individuals. (more…)