New OCC Guidance Updates Requirements for Deposit-Related Consumer Credit Products

Earlier this month, the Office of the Comptroller of the Currency (“OCC”) issued a new publication called the “Deposit-Related Consumer Credit” document. Then, nine days later, it removed the document from its website to make revisions. Check this link for the updated booklet once it is reposted on the Treasury website:
http://www.occ.treas.gov/news-issuances/bulletins/2015/bulletin-2015-13.html

This updated document provides new guidance and examination procedures the OCC will use to assess a bank’s deposit-related consumer credit products (“Deposit Products”). Deposit Products covered by the publication include check credit (overdraft lines of credit, cash reserves and special drafts), overdraft protection services, and deposit advances. The OCC mirrors many requirements the CFPB has articulated in its proposed rule for prepaid products.

Some of the requirements highlighted in the publication include:

  • Opt-In – Institutions should only enroll customers in Deposit Products who have requested enrollment.
  • Ability to Repay – Banks’ underwriting practices should analyze the applicant’s income or assets and debt obligations in order to conduct the required Ability to Repay analysis.
  • Fees – Fees charged in connection with Deposit Products must be reasonably related to the program’s costs and attendant risks.

The OCC publication explains that banks also must monitor the volume of revenue from Deposit Products and evaluate whether the institution “unduly relies” on such fees.

Contact Spilman if you have any questions about the new guidance and how it may apply to your organization, either formally or as best practices based on your regulator.

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By R. Scott Adams

R. Scott Adams

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