FDIC Issues Final Guidance Regarding Deposit Advance Products

The FDIC has issued final supervisory guidance to FDIC-supervised financial institutions which is intended to ensure that banks are aware of the credit, reputational, operational and compliance risks associated with deposit advance products and have taken steps to effectively mitigate those risks.

Deposit advance products are a type of small-dollar, short-term credit product that some depository institutions offer to customers maintaining a deposit account, reloadable prepaid card or similar deposit-related vehicle. The guidance supplements the FDIC's existing guidance on payday loans and subprime lending, as well as the FDIC's guidelines on small-dollar loans.

See: Guidance Regarding Deposit Advance Products; FDIC Press Release.See also: FDIC Guidelines for Payday Lending; FDIC Guidelines on Small-Dollar Loans.