Source: Kate Berry - American Banker

The Trump administration has urged banks and credit unions to compete with high-cost payday lenders to offer more credit options to consumers. But banks remain wary of a product they still see as risky, observers said.

The prudential bank regulators issued guidance in May encouraging banks to embrace small-dollar lending to help consumers hurt by the coronavirus pandemic. Two days later, the Consumer Financial Protection Bureau approved a process for banks to offer installment loans or lines of credit for amounts of up to $2,500.

But nearly two months later, banks are still said to be balking at a product that the industry for the most part has long viewed with reluctance.

Read Full Article: Uncertainty about CFPB has banks leery of small-dollar lending