§5624 Low-cost Alternatives to Small Dollar Loans

Summary

The Secretary can set up multi-year pilot programs that use grants, cooperative agreements, financial agency agreements, or similar contracts with eligible organizations. Those organizations will make low-cost, small loans to consumers as alternatives to more expensive small-dollar loans. Loans must be offered on fair, reasonable terms and lending practices. Each organization that gets funding must promote and take steps to provide financial education and help—like counseling, classes, or wealth-building programs—to every borrower. The Secretary may also create reasonable programs to expand access to those education and counseling services for people who get the loans.