{"id":8165,"date":"2025-01-08T06:00:00","date_gmt":"2025-01-08T11:00:00","guid":{"rendered":"https:\/\/payliance.com\/?p=8165"},"modified":"2025-07-01T16:17:13","modified_gmt":"2025-07-01T20:17:13","slug":"understanding-the-small-dollar-lending-rule-a-game-changer-for-lenders","status":"publish","type":"post","link":"https:\/\/payliance.com\/understanding-the-small-dollar-lending-rule-a-game-changer-for-lenders\/","title":{"rendered":"Understanding the Small Dollar Lending Rule"},"content":{"rendered":"\n<div class=\"wp-block-columns is-layout-flex wp-container-core-columns-is-layout-9d6595d7 wp-block-columns-is-layout-flex\">\n<div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\"><h2 class=\"wp-block-post-title\">Understanding the Small Dollar Lending Rule<\/h2>\n\n\n<div class=\"wp-block-columns is-layout-flex wp-container-core-columns-is-layout-9d6595d7 wp-block-columns-is-layout-flex\">\n<div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\">\n<div class=\"wp-block-group is-nowrap is-layout-flex wp-container-core-group-is-layout-ad2f72ca wp-block-group-is-layout-flex\"><div class=\"taxonomy-category wp-block-post-terms\"><a href=\"https:\/\/payliance.com\/payliance-news\/\" rel=\"tag\">Payliance News<\/a><span class=\"wp-block-post-terms__separator\">, <\/span><a href=\"https:\/\/payliance.com\/payments-blog\/\" rel=\"tag\">Payments<\/a><\/div>\n\n<div class=\"wp-block-post-date\"><time datetime=\"2025-01-08T06:00:00-05:00\">January 8, 2025<\/time><\/div><\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n\n\n\n<p>Lenders offering short-term, high-cost loans have seen the <strong>Small Dollar Lending Rule (SDLR)<\/strong> looming on the horizon for years. Now, with the <strong>March 31, 2025<\/strong> deadline set, the time to act is here. Whether you&#8217;re a seasoned lender or relatively new to the space, the SDLR is set to disrupt traditional practices, creating challenges\u2014but also opportunities.<\/p>\n\n\n\n<p class=\"has-vivid-cyan-blue-color has-text-color has-link-color wp-elements-88dbb59313a76d9dc43b982900eb5a4d\"><strong>What\u2019s Driving the SDLR?<\/strong><\/p>\n\n\n\n<p>The <strong>Consumer Financial Protection Bureau (CFPB)<\/strong> introduced the SDLR to protect borrowers by limiting harmful lending practices. But for lenders, it means rethinking operational processes, especially around payment attempts and borrower communications.<\/p>\n\n\n\n<p>Here\u2019s the core of the SDLR:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Lenders can no longer make <strong>more than two consecutive failed payment attempts<\/strong>\u2014across any payment channel.<\/li>\n\n\n\n<li>Following any such two consecutive failed payment attempts, a Lender must first secure a <strong>new<\/strong> authorization from their Borrower <strong>before<\/strong> any new or subsequent payment attempts are made.<\/li>\n\n\n\n<li>Borrowers must receive written <strong>notifications<\/strong> ahead of new attempts that deviate from the agreed terms or schedule.<\/li>\n\n\n\n<li>Lenders must keep detailed records of payment attempts and borrower communications for <strong>36 months<\/strong>.<\/li>\n<\/ul>\n\n\n\n<p class=\"has-vivid-cyan-blue-color has-text-color has-link-color wp-elements-c661bd017670b46fdfae7d2677e3c26c\"><strong>Why Does This Matter to Lenders?<\/strong><\/p>\n\n\n\n<p>Compliance isn\u2019t just about avoiding penalties; it\u2019s about maintaining borrower trust and operational stability:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Financial Penalties<\/strong>: Non-compliance could result in CFPB enforcement actions, fines, and reputational damage.<\/li>\n\n\n\n<li><strong>Operational Complexity<\/strong>: Tracking failed attempts across channels, sending notifications, and maintaining records can strain existing processes.<\/li>\n<\/ul>\n\n\n\n<p>Think of compliance as more than a regulatory hurdle\u2014it\u2019s an opportunity to streamline operations and build credibility with your borrowers.<\/p>\n\n\n\n<p class=\"has-vivid-cyan-blue-color has-text-color has-link-color wp-elements-84b38ee3261fc5e54835e180fb68e50b\"><strong>Who Is Impacted?<\/strong><\/p>\n\n\n\n<p>If your portfolio includes:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Payday loans<\/strong><\/li>\n\n\n\n<li><strong>Vehicle title loans<\/strong><\/li>\n\n\n\n<li><strong>High-cost installment loans<\/strong><br>&#8230;you\u2019re likely affected. Loans secured by real estate or vehicles, wage advances, and no-cost advances may be excluded, but every lender should conduct a thorough audit to ensure compliance.<\/li>\n<\/ul>\n\n\n\n<p class=\"has-vivid-cyan-blue-color has-text-color has-link-color wp-elements-49d7272c674570c57dea827c65c99f69\"><strong>How Payliance Helps Lenders Prepare<\/strong><\/p>\n\n\n\n<p>Payliance is here to ease your compliance burden with tools designed to keep you ahead of regulatory challenges:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Automated Notifications<\/strong>: Eliminate the guesswork in borrower communications by automating notices.<\/li>\n\n\n\n<li><strong>Failed Payment Monitoring<\/strong>: Track attempts across payment channels to avoid prohibited actions.<\/li>\n\n\n\n<li><strong>Data Retention Solutions<\/strong>: Easily maintain the required 36-month record of communications and attempts.<\/li>\n<\/ul>\n\n\n\n<p><strong>Take Action Today:<\/strong> <a href=\"https:\/\/payliance.com\/get-started\/\">Schedule a compliance consultation with Payliance<\/a> to ensure your operations are ready before the SDLR goes into effect.<\/p>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Lenders offering short-term, high-cost loans have seen the Small Dollar Lending Rule (SDLR) looming on the horizon for years. Now, with the March 31, 2025 deadline set, the time to act is here. Whether you&#8217;re a seasoned lender or relatively new to the space, the SDLR is set to disrupt traditional practices, creating challenges\u2014but also [&hellip;]<\/p>\n","protected":false},"author":11,"featured_media":8170,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_eb_attr":"","content-type":"","footnotes":""},"categories":[10,1],"tags":[73,68,58],"class_list":["post-8165","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-payliance-news","category-payments-blog","tag-lenders","tag-lending","tag-sdlr"],"acf":[],"_links":{"self":[{"href":"https:\/\/payliance.com\/wp-json\/wp\/v2\/posts\/8165","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/payliance.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/payliance.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/payliance.com\/wp-json\/wp\/v2\/users\/11"}],"replies":[{"embeddable":true,"href":"https:\/\/payliance.com\/wp-json\/wp\/v2\/comments?post=8165"}],"version-history":[{"count":3,"href":"https:\/\/payliance.com\/wp-json\/wp\/v2\/posts\/8165\/revisions"}],"predecessor-version":[{"id":9814,"href":"https:\/\/payliance.com\/wp-json\/wp\/v2\/posts\/8165\/revisions\/9814"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/payliance.com\/wp-json\/wp\/v2\/media\/8170"}],"wp:attachment":[{"href":"https:\/\/payliance.com\/wp-json\/wp\/v2\/media?parent=8165"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/payliance.com\/wp-json\/wp\/v2\/categories?post=8165"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/payliance.com\/wp-json\/wp\/v2\/tags?post=8165"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}