FDIC Guidance for Third-Party Lending
The ability of banks to partner with third parties to expand their credit operations has significant benefits for borrowers, including those who are uninterested in or not well served by traditional banking services. The Federal Deposit Insurance Corporation’s (FDIC) interest in ensuring the safety and soundness of banks that participate in third-party lending is understandable. It is also important, however, that banks’ efforts to expand credit access are not dampened by excessively onerous requirements or unnecessary legal and regulatory confusion. To that end, the FDIC should provide clarity to lenders by unambiguously acknowledging the legitimacy of the third-party loan origination model.