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What are some of the rules and regulations to consider if a bank starts to offer online unsecured personal loans? Also, have there been any fines, penalties, enforcement actions, consent orders etc. regarding offering online loans? – IBA Compliance Connection

IBA Compliance Connection

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What are some of the rules and regulations to consider if a bank starts to offer online unsecured personal loans? Also, have there been any fines, penalties, enforcement actions, consent orders etc. regarding offering online loans?

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The laws and regulations applicable to online unsecured personal loans are the same laws and regulations that would apply to any unsecured personal loan. We cannot provide a comprehensive list that would cover every possible situation, but examples in federal law include everything from Regulation Z to fair lending requirements to regulations under the Military Lending Act. Examples in Illinois law include the Interest Act, Financial Services Development Act, and more.

One recent consent order involving an online consumer lender is the FTC action against Avant LLC, which offers unsecured installment loans for lenders through its website. We have provided a link to the FTC consent order and related resources below.

For resources related to our guidance, please see: