WASHINGTON -- The FDIC Advisory Committee on Economic Inclusion endorsed an agency plan to create a two-year pilot for banks to establish reasonably priced, small dollar loan programs.
"The FDIC, and its chairman, Sheila Bair, should be proud of recent efforts that encourage banks to reach out and serve the growing ranks of the unbanked and underserved population in our country," ComE-IN Chairman Diana L. Taylor, the current New York State Bank superintendent, commented. The group's first meeting was held March 28. "I want to thank the committee members, and particularly Chairman Taylor, for their valuable input into this initiative that will help identify alternatives to high-cost loans being offered to those in our society who are outside of the banking mainstream," Bair said. Key features of the pilot project could include loans up to $1,000; mandatory savings components; payment periods that extend beyond a single pay period; interest rates below 36%; low or no origination fees; no prepayment penalties; prompt loan application processing; and access to financial education to help with asset building. The FDIC is considering Community Reinvestment Act credit as incentive or selection as depositories for FDIC funds.
The FDIC Board must approve the program. No timeline has been set, but Bair said she would like the board to consider it in "short order."
The Pennsylvania Credit Union Association presented its Better Choice program at the meeting. The advisory committee also heard from Chris Larsen, CEO/co-founder of Prosper Marketplace, Inc. and Steven T. Bigari, president/CEO of America's Family, Inc.
The ComE-IN members include Martin Eakes, president/CEO of Self-Help Credit Union and the Center for Responsible Lending, academics, government officials, and other lenders. NCUA Board Member Gigi Hyland was also in attendance. "There is a strong parallel between the mission of this Committee and that of NCUA\'s Outreach Task Force, which I chair," she explained. "The exchange of information and ideas will be invaluable as the Outreach Task Force moves ahead in the coming months. I look forward to future meetings, to finding more and better ways for credit unions to fulfill their mission of people helping people, and ways in which the NCUA can be helpful in achieving that goal."