Regulatory AlertsCA 13-7: Statement on Deposit Advance Products
The Federal Reserve issued this guidance to state member banks to highlight significant consumer risks associated with deposit advance products. Banks are required to consider potential consumer harm and elevated compliance risks when designing and offering these products. This directive responds to the Consumer Financial Protection Bureau's April 2013 white paper on payday loans and deposit advance products.
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CA 13-7: Statement on Deposit Advance Products
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON, D.C. 20551
DIVISION OF CONSUMER AND COMMUNITY AFFAIRS
CA 13-7
April 25, 2013
TO THE OFFICER IN CHARGE OF SUPERVISION AT EACH FEDERAL RESERVE BANK AND TO STATE MEMBER BANKS
SUBJECT:
Statement on Deposit Advance Products
Applicability to Community Banking Organizations: This guidance applies to all state member banks, including those with $10 billion or less in consolidated assets.
The Federal Reserve is issuing the attached policy statement, Statement on Deposit Advance Products , to emphasize to state member banks the significant consumer risks associated with deposit advance products in light of the Consumer Financial Protection Bureau’s April 24, 2013 white paper entitled "Payday Loans and Deposit Advance Products: A White Paper of Initial Data Findings." 1 State member banks are expected to consider the risks associated with deposit advance products, including potential consumer harm and the potential for elevated compliance risk, when designing and offering such products.
Federal Reserve Banks are asked to distribute this letter and the accompanying guidance to state member banks, as well as to supervisory and examination staff. Questions on the attached guidance should be directed to Carol Evans, Assistant Director, at (202) 452-2051; or Amy Henderson, Managing Counsel, at (202) 452- 3140. In addition, questions may be sent via the Board’s public website. 2
1
http://files.consumerfinance.gov/f/201304_cfpb_payday-dap-whitepaper.pdf
2
See http://www.federalreserve.gov/apps/contactus/feedback.aspx
signed by Sandra F. Braunstein Director Division of Consumer and Community Affairs
Attachments:
Statement on Deposit Advance Products
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Last Update:
April 20, 2017