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Congress·In Committee·about 1 year ago

Congress proposes stricter rules for small-dollar loans, limiting surprise withdrawals and sale of bank info

Also known as: SAFE Lending Act of 2025

Legislative Progress

✓ Filed
Review
Senate
House
President

Impacts

Mixed Impacts(1)
Tribal Member
Neutral

Key Points

  • Would limit “remotely created checks” so they can only be used if you name someone in writing, helping stop surprise withdrawals from your bank account.
  • If you agree to repay a small-dollar loan by automatic bank transfer, the bill would treat that like ongoing autopay, giving you stronger rights to stop or block withdrawals.
  • Would require small-dollar lenders (loans up to $5,000) to register with the main federal consumer finance watchdog before making these loans.
  • For online and other remote loans (and loans by national banks), lenders would have to follow the borrower’s state rules on interest rates and fees, not the lender’s home state rules.
  • Would restrict “lead generators” from collecting and selling key financial info (like account and routing numbers) for small-dollar loan offers unless they are the actual lender. Also bans overdraft fees on prepaid cards.
Consumer ProtectionData PrivacyEconomy

Milestones

2 milestones2 actions
Feb 27, 2025Senate

Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.

Feb 27, 2025

Introduced in Senate

What Happens Next

Projected impacts based on AI analysis

After CFPB’s final rules take effect (within about 1 year after enactment)

Small-dollar lenders register with CFPB before issuing covered loans

Borrowers may see fewer untracked lenders; repeat bad actors may be easier to spot and supervise, and unregistered lenders could be blocked or penalized

After CFPB’s final rules take effect (within about 1 year after enactment)

Online/remote small-dollar lenders start following the borrower’s state limits on interest and fees

Your loan price and fees would be tied to where you live, which may reduce high-cost offers from out-of-state lenders but may also reduce loan availability in some states

After CFPB’s final rules take effect (within about 1 year after enactment)

Prepaid overdraft fees are no longer allowed for prepaid accounts

If a purchase would overdraw the prepaid balance, it may be declined instead of going through with a fee, reducing surprise charges

After CFPB’s final rules take effect (within about 1 year after enactment)

Lead-collector sites stop collecting and reselling sensitive financial info for small-dollar loan applications unless they are the lender

Fewer situations where your bank details or Social Security number gets passed to many third parties; you may also see fewer “instant match” sites

Related News

2 articles
American Financial Services Association (AFSA)·12 months ago

AFSA Opposes Anti-Consumer Credit Legislation

AFSA says the SAFE Lending Act would restrict certain check-based payments and require state-licensed installment lenders to register with the CFPB, arguing it would reduce access to credit.

CR−
Senator Martin Heinrich (website)·about 1 year ago

Heinrich Cosponsors Legislation to Stop Predatory Payday Lending Practices

Press release describing the SAFE Lending Act and its intended consumer protections targeting predatory payday lending practices.

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Source Information

Document Type

Congressional Bill

Official Title

SAFE Lending Act of 2025

Bill NumberS 780
Congress119th Congress
ChamberSenate
Latest ActionRead twice and referred to the Committee on Banking, Housing, and Urban Affairs.

Sponsor

Cosponsors

(11)
D: 10I: 1

Analysis generated by AI. While we strive for accuracy, this should not be considered legal or professional advice. Always verify information with official government sources.