Regulatory AlertsGuidance on Private Student Loans with Graduated Repayment Terms at Origination
The Federal Reserve, CFPB, FDIC, NCUA, and OCC issued joint guidance requiring financial institutions to consider specific principles when originating private student loans with graduated repayment terms. The agencies recognize that such terms may align payments with borrowers' income levels but mandate that institutions prudently underwrite these loans consistent with safe and sound lending practices. Institutions must also comply with all applicable consumer laws by providing clear disclosures regarding payment timing and amounts to ensure borrower understanding.
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