pOLICY/PROCEDURES

Description

We are required to write a new policy of a change that is currently taking place within the workplace or previous workplace that can be presented to the board of directors or executives for approval.

I chose to do my policy/procedure on the new Small Loan Rule by CFP that finance companies must follow. To comply with the rule I want to present a policy to where we will not allow customers who has a APR interest rate over 36% to enroll in ACH payments. The rule will be effective November 19, 2020. The rule requires customers who has APR over 36% to receive notice before a ACH draft payment comes out of there account. To avoid having to do this my plan is to not allow customers with 36% interest to do ACH. Here is resoures below of the rule. The second link is regarding
See below:

3. Longer-term loans. Longer-term loans are extensions of credit that have a:

Cost of credit exceeding a 36 annual percentage rate (APR) (or, for open-end credit, the lender imposes a finance charge in any billing cycle in which the principal balance is $0); and
Leveraged payment mechanism giving the lender the right to initiate transfers from the consumer’s account without further action by the consumer. 12 CFR §1041.3(b)(3).
https://www.consumerfinance.gov/about-us/newsroom/cfpb-issues-final-rule-small-dollar-lending/

https://www.consumerfinance.gov/policy-compliance/guidance/consumer-lending-resources/payday-lending-rule/payday-lending-rule-faqs/