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Title 12, Banks and BankingRelease 119-110

§5624 Low-cost Alternatives to Small Dollar Loans

Title 12 › CHAPTER 53 — WALL STREET REFORM AND CONSUMER PROTECTION › SUBCHAPTER VII — IMPROVING ACCESS TO MAINSTREAM FINANCIAL INSTITUTIONS › § 5624

Last updated Sep 22, 2026|Official source

Summary

The Secretary can create multi-year pilot programs that use grants, agreements, or contracts with eligible groups to offer low-cost, small loans as alternatives to expensive small-dollar loans. Loans must be offered on terms that are fair and reasonable for consumers. Each group that gets a grant must promote and help provide financial education and counseling, like classes or wealth-building programs, to every borrower. The Secretary may also set up extra measures to widen access to those services.

Full Legal Text

Title 12, §5624

Banks and Banking, Source: USLM XML via OLRC

(a)Grants authorized
The Secretary is authorized to establish multiyear demonstration programs by means of grants, cooperative agreements, financial agency agreements, and similar contracts or undertakings, with eligible entities to provide low-cost, small loans to consumers that will provide alternatives to more costly small dollar loans.
(b)Terms and conditions
(1)In general
Loans under this section shall be made on terms and conditions, and pursuant to lending practices, that are reasonable for consumers.
(2)Financial literacy and education opportunities
(A)In general
Each eligible entity awarded a grant under this section shall promote and take appropriate steps to ensure the provision of financial literacy and education opportunities, such as relevant counseling services, educational courses, or wealth building programs, to each consumer provided with a loan pursuant to this section.
(B)Authority to expand access
As part of the grants, agreements, and undertakings established under this section, the Secretary may implement reasonable measures or programs designed to expand access to financial literacy and education opportunities, including relevant counseling services, educational courses, or wealth building programs to be provided to individuals who obtain loans from eligible entities under this section.

Reference

Citations & Metadata

Citation

12 U.S.C. § 5624

Title 12, Banks and Banking

Last Updated

Sep 22, 2026

Release point: 119-110