SAFE Lending Act of 2025
SAFE Lending Act of 2025
Plain Language Summary
# SAFE Lending Act of 2025 - Summary **What the Bill Would Do:** The SAFE Lending Act aims to strengthen consumer protections in lending and banking, particularly for small-dollar loans and electronic transactions. Key provisions include requiring consumers to explicitly authorize remotely created checks (checks created without the account holder's signature), giving borrowers the right to stop payment on small-dollar loans paid through electronic transfers, and requiring small-dollar lenders to register with the Consumer Financial Protection Bureau. The bill also addresses overdraft fees and limits how lenders can collect personal information from borrowers. **Who It Affects:** This bill primarily impacts consumers who use small-dollar loans, overdraft services, and electronic banking.
It also affects small-dollar lenders, payday loan companies, and other non-bank credit providers who would need to register and comply with new regulations. Banks and financial institutions would need to adjust their policies around remotely created checks and overdraft practices. **Current Status:** The bill is currently in committee (as of the 119th Congress), meaning it has not yet been debated or voted on by the full Senate. Senator Jeff Merkley (D-OR) introduced the legislation.
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
Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.