Consumers now have more control over their own financial decisions and loan options.
An interagency notice meant to encourage lenders to offer small consumer loans also provides federal agencies too much say on what constitutes “reasonable” pricing.
Some bankers, economists, policy experts and even Mark Cuban say that creative uses of overdraft programs could be lifelines for consumers and businesses whose finances have been upended by the coronavirus crisis.
Regulators point to traditional financial institutions as well-positioned to meet short-term credit needs during the coronavirus pandemic, but there are still a host of questions about whether the industry should try to compete with high-cost lenders.
The joint statement said examiners will not impede banks’ responsible efforts to offer open lines of credit, closed-installment loans or other products to borrowers dealing with fallout from the pandemic.
Banks typically don't offer loans to cash-strapped consumers, and are poorly positioned to start doing so on an emergency basis — unless the government steps in to help.