Receivables specialist Jonathan Koop founded and serves as CEO of Bankrupt Debt Acquisition, a Scottsdale, Arizona company that purchases and services bankrupt assets from banks, debt traders, and government agencies. Jonathan Koop has attended several industry trade shows, such as the one put on by Online Lenders Alliance (OLA).
OLA applauded the recent guidance issued by four federal agencies to lenders in offering small-dollar loans. A small-dollar loan is a form of short-term credit available to financially distressed individuals. The guidance was issued by the Federal Reserve Board of Governors, the National Credit Union Administration, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency.
The issuance of the guidance was in accordance with the observation of the Federal Reserve that the financial crisis brought by the coronavirus has made it difficult for 40 percent of Americans to even raise $400 to defray out-of-pocket expenses. A small-dollar loan is a readily available credit option for individuals during this crisis.
For OLA, the guidance is a welcome development, since small-dollar loans provide flexibility to individuals. Additionally, the guidance recognizes that interest rate caps on short-term credit have previously made such products impossible, but a number of lenders are now making such short-term loans, even at no interest.
The guidance strengthens the position of OLA members, most of which offer credit to non-prime consumers. Small-dollar loans truly provide a lifeline to Americans during this difficult time.
Jonathan Koop 