Despite recent regulatory changes designed to encourage banks to offer small dollar loans few banks are taking up the challenge; with an election less than four months away many banks are concerned about a flip back to more stringent rules on small dollar lending so they don’t want to put time and resources into building a product with an uncertain future; the recent Supreme Court decision allowing CFPB directors to be fired at will upended plans by banks to develop small-dollar loan products; the CEO of the Consumer Bankers Association, Richard Hunt, said, “Banks want to serve their customers, but with uncertainty surrounding the U.S. Supreme Court ruling to create an at-will [CFPB] director during an election year, I would not expect many institutions to invest time and resources into a new product”; the only large banks to offer a small dollar loan product are US Bank and KeyBank and that is not likely to change any time soon. American Banker.
Peter Renton is the chairman and co-founder of LendIt Fintech, the world’s first and largest digital media and events company focused on fintech. Peter has been writing about fintech since 2010 and he is the author and creator of the Fintech One-on-One Podcast, the first and longest-running fintech interview series. Peter has been interviewed by the Wall Street Journal, Bloomberg, The New York Times, CNBC, CNN, Fortune, NPR, Fox Business News, the Financial Times, and dozens of other publications.