DFI Licensed Lenders and Payday Lenders Should Be Cautious During COVID-19 Crisis
On March 18, 2020, the Wisconsin Department of Financial Institutions (“DFI”) issued emergency guidance to licensed lenders and payday lenders cautioning them from increasing customary interest rates, fees, or any costs of borrowing in response to the COVID-19 crisis.
DFI explicitly warned that increases will be monitored closely and that any increases could subject the lender to an adverse finding. In other words, any such increases in response to the COVID-19 crisis would be deemed “an essential failure of [the lenders’] character and fitness.”
DFI further warned that willfully engaging in opportunistic and exploitative conduct could result in the suspension or revocation of the lender’s license under the character and fitness requirements for businesses, officers, and directors.
Additionally, DFI encourages lenders to “reduce your rates and fees as low as operational expenses and sound lending practices allow” so that lenders can be a solution to help struggling Wisconsin families and businesses navigate these difficult times.