Stopping Abuse and Fraud in Electronic Lending (SAFE Lending Act).
This law strengthens consumer control over bank accounts by restricting unauthorized checks and applying robust protections to electronic repayments of small loans. Crucially, it mandates that small-dollar loans offered online must adhere to the interest rate and fee limits of the consumer's home state, combating predatory lending practices. Furthermore, overdraft fees on prepaid cards are prohibited.
Key points
Stronger protection against high-interest loans: Online loans up to $5,000 must comply with the interest rate and fee limits of the borrower's state of residence.
End to overdraft fees on prepaid cards: Charging overdraft fees on prepaid accounts is prohibited.
Restriction on data sharing: Companies brokering small loans (lead generators) are generally banned from distributing sensitive financial information (like account numbers) to other lenders.
Increased account control: Banks cannot process remotely created checks (lacking a signature) without the customer's explicit, written authorization provided directly to the bank.
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