The CFPB issued a no-action letter to Bank of America saying that the agency will never just just just take enforcement action from the bank associated with a lending program that is small-dollar. Especially, the CFPB claimed so it wouldn’t normally act under Sections 1031 (“Prohibiting Unfair, Deceptive, or Abusive Acts or Practices”) and 1036 (“Prohibited Acts”) of Dodd-Frank.
Based on the Bank of America no-action letter request, the lender’s small-dollar credit item (“Balance Assist”) is organized as being a fixed-term, amortizing small-dollar installment loan become reimbursed over 90 days. The total amount Assist system would provide loans in increments of $100 as much as $500, by having a $5 flat fee that is administrative no matter what the amount lent, in accordance with hardly any other administrative costs charged. Bank of America specified that the total amount Assist item could be provided simply to customers with Bank of America checking records with inflows surpassing a predetermined threshold.