No, we do not believe the longer loan terms will subject you to heightened scrutiny, particularly because you are providing the loans without charging interest.

The FDIC Guidelines on Small-Dollar loans identify several characteristics of responsible and affordable small-dollar credit programs, including affordability and a payment structure that encourages principal reduction. Since these loans will not be accruing any interest, extending the loan term beyond six months will increase their affordability (by reducing the periodic payment amounts), without sacrificing the reduction of principal through periodic payments (the longer payment schedule will not result in larger interest costs that would interfere with principal reduction, because no interest will be accruing).

We do not believe that this answer will change after the CFPB releases its upcoming payday lending rules. In a preliminary outline released in March of 2015, the CFPB indicated that its rules will apply to short term loans under 45 days and longer term loans with APRs over 36% and other lender-friendly features. Since these loans are far longer than 45 days and impose no interest, it is unlikely that the CFPB rules will apply.

For resources related to our guidance, please see:

• FDIC FIL 50-2007, Affordable Small-Dollar Loan Guidelines (See discussion under “Features of Responsible, Affordable Small-Dollar Credit Programs”)

• CFPB Small Business Advisory Review Panel, Outline of Proposals Under Consideration and Alternatives Considered (Payday Loans) (P. 6 of the document) (“The proposals described below cover (a) short-term credit products with contractual durations of 45 days or less, and (b) longer-term credit products with an all-in annual percentage rate in excess of 36 percent where the lender obtains a preferred repayment position by either obtaining (1) access to repayment through a consumer’s account or paycheck, or (2) a nonpurchase money security interest in the consumer’s vehicle.”)