SAFE Lending Act of 2025
SAFE Lending Act of 2025
Plain Language Summary
# SAFE Lending Act of 2025 Summary **What It Would Do:** The SAFE Lending Act aims to protect consumers in small-dollar lending and electronic banking transactions. If passed, it would require consumers to explicitly authorize remotely created checks (checks created and signed electronically without the account holder's physical signature) before they can be issued. The bill would also establish new rules around small-dollar loans, including requiring lenders to register with the Consumer Financial Protection Bureau and giving consumers the right to stop payments on electronic fund transfers used to repay these loans. **Who It Affects:** This bill primarily impacts consumers who use small-dollar loans, take out short-term credit, or have concerns about unauthorized checks drawn from their accounts.
It also affects small-dollar lenders and financial institutions that would need to comply with new registration and disclosure requirements. **Current Status:** The bill is currently in committee (HR 1658, introduced in the 119th Congress by Rep. Suzanne Bonamici, D-OR), meaning it has not yet been voted on by the full House of Representatives. It remains in the early legislative process.
CRS Official Summary
Stopping Abuse and Fraud in Electronic Lending Act of 2025 or the SAFE Lending Act of 2025This bill creates additional consumer protections applicable to certain credit and banking transactions, including matters concerning remotely created checks, electronic fund transfers, registration of small-dollar lenders, overdraft fees, and the collection of personal information.Under the bill, remotely created checks may only be issued by a person specifically designated in writing by a consumer. The consumer must provide the designation to the consumer's depository institution. (A remotely created check is a check not issued by the bank and not signed by the account owner.)A voluntary agreement to repay a small-dollar consumer credit transaction by an electronic fund transfer is subject to certain protections, including the right of the consumer to stop payment.Small-dollar consumer credit providers must register with the Consumer Financial Protection Bureau. Any small-dollar consumer credit transaction is subject to the laws of the state in which the consumer resides.The bill also prohibits overdraft fees on prepaid accounts.
Latest Action
Referred to the House Committee on Financial Services.