Issued by FDIC
§ 1041.4 Identification of unfair and abusive practice.
Editor's Note: The compliance date for this section is November 19, 2020. On February 14, 2019, the CFPB published a proposal at 84 FR 4252 that would, among other changes, remove and rescind this section.
It is an unfair and abusive practice for a lender to make covered short-term loans or covered longer-term balloon-payment loans without reasonably determining that the consumers will have the ability to repay the loans according to their terms.
Section 1041.4—Identification of Unfair and Abusive Practice
1. General. A lender who complies with §1041.5 in making a covered short-term loan or a covered longer-term balloon-payment loan has not engaged in the unfair and abusive practice under §1041.4. A lender who complies with §1041.6 in making a covered short-term loan has not committed the unfair and abusive practice under §1041.4 and is not subject to §1041.5.