The banking agencies have taken different actions on deposit-advance products – extensions of credit akin to payday loans long the target of protest by consumer advocates on grounds that vulnerable borrowers are trapped in spiraling high-cost loans. Defenders of the products believe they come with appropriate disclosures and, in the banking sector, that offerings are more protective of consumer interests than similar non-bank products. In the wake of the CFPB’s creation, consumer-financial protection issues are now largely its purview. Nevertheless, the OCC and FDIC have proposed stringent action premised not only on prudential concerns, but also on consumer-protection worries. The OCC and FDIC proposals are the most specific and prescriptive, for example mandating a new ability-to-repay test for covered loans and otherwise stipulating permissible product characteristics. The FRB statement expresses the need for safety-and-soundness, consumer-compliance and vendor- management controls, but does not go into detail or specify sanctions examiners will impose in this arena (included by the OCC and FDIC).

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