John Reich
“…FDIC has developed the reputation of being soft on payday lending because we have not exclusively restricted payday lending activities. I think it is our view that there is a market of underserved people who are being served by payday lending, and that certain kinds of payday lending activities, if tightly supervised and controlled, do not represent safety and soundness concerns to the banks who engage in those activities.”
Federal Deposit Insurance Corporation (FDIC) vice chairman John Reich expressed his views on payday lending at the House Financial Services Committee’s Subcommittee on Financial Institutions and Consumer Credit…
His statement was in response to the following question from North Carolina’s Rep. Melvin Watt:
“I am advised that the OTS (Office of Thrift Supervision), the Federal Reserve and the OCC (Office of the Comptroller of the Currency) each have taken steps to prevent regulated institutions from renting or using their charters to enable payday lending where there are state laws that prohibit it. Why is it that the FDIC is the only bank regulator that has not done that?”
Reich also said:
“We have not opened the door to payday lenders at the FDIC.”
John Reich is vice chairman of the Federal Deposit Insurance Corporation.
Source: Pitfalls for Payday Loan Lenders? by Herb Greenberg (CBS MarketWatch)
FDIC Consumer Protection Acts (Truth in Lending Act) and FDIC Guidelines for Payday Lending can be found in our Links section.
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