FDIC releases small-dollar loan template

Even as payday lenders in Colorado prepare for new rules governing their business, federal regulators are trying to encourage banks to step into the market. According to the Federal Deposit Insurance Corp. independent analyses put payday or small-dollar loan volume at more than $40 billion a year.

Following a two-year pilot project, the FDIC recently released a template for small-dollar loan programs. A total of 28 banks – none in Colorado – completed the study, extending 34,400 small-dollar loans with a principal balance totaling $40.2 million. The banks were spread across 27 states and had assets ranging from $28 million to…