WASHINGTON—The Consumer Financial Protection Bureau has granted a no-action letter (NAL) to Bank of America related to its “Balance Assist” small-dollar loan product.
Issued under the updated NAL Policy from last year, NALs provide increased regulatory certainty that the Bureau will not bring a supervisory or enforcement action against a company for providing a product or service under certain facts and circumstances, the CFPB stated.
Bank of America’s NAL application is based on the NAL Template issued by the Bureau on May 22, 2020 in response to an application from the Bank Policy Institute. The Bureau said it approved the NAL Template to further competition in the small-dollar lending space, which it further said fosters access to credit while including important protections for consumers who seek small-dollar loan products.
The Bureau also submitted a Paperwork Reduction Act (PRA) notice to the Office of the Federal Register for publication. The PRA notice relates to its research efforts to identify information that could be disclosed to consumers during the payday loan process to help them make better-informed decisions, according to the Bureau.
“The testing of different consumer disclosures supports the Bureau’s commitment to ensuring that consumers have the information they need to understand the small dollar products available to them so they can make the choices that are best for them and their personal circumstances,” the CFPB said.
A copy of Bank of America’s NAL application can be found here.