Issued by FDIC
§ 1041.4 Identification of unfair and abusive practice.*
Effective October 20, 2020, this section is removed and reserved.
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.