FinTech Partnership FAQs2022-03-04T18:25:59+00:00

CCBank FinTech Partnerships Provide Regulated Loan Products to Consumers Seeking Credit and Finance Options

We understand that members of our community might have questions pertaining to CCBank’s partnership programs that offer higher interest loans to consumers seeking options to meet their financial needs. The information provided below will hopefully clarify these products for you, but we also invite you to reach out to us directly if we haven’t answered your questions at CustomerCare@CCBank.com.

Do these high-interest loan FinTech partnerships comprise the core of CCBank’s business?2022-02-11T19:39:16+00:00

Since 1993, CCBank’s core business has been and continues to be supporting our Utah families and businesses through deposit, loan, and other financial products that help facilitate their financial well-being and growth. We are focused on offering personalized, local service and industry-leading rates to our clients while reinvesting a portion of our profits to support area nonprofits, high schools, and other organizations doing good in our communities. We are committed to hiring local talent and providing great paying jobs that support our economy. In short, we are a Utah community bank—locally owned and operated.

Our community bank focus is demonstrated by facts. As of year-end 2021, over 80% of our lending portfolio is comprised of  “traditional” loans unrelated to our FinTech programs. In other words, although our lending programs with FinTech are indeed an important part of our diversified lending business, these programs are by no means a solitary focus or a majority of the asset base for CCBank despite suggestions and insinuations to the contrary in recent media reports. We very much continue to be a locally owned and operated Utah community bank.

How are these types of loans different than what are commonly known as payday loans?2022-02-11T19:39:44+00:00

The consumer loan products that we offer through our FinTech relationships constitute a much more consumer friendly alternative to payday loans. For nearly two decades, the largely unregulated payday loan industry has offered financially desperate consumers payday or deposit-advance loans that frequently carry annual percentage rates (APRs) upwards of 400 percent and at times exceeding 700%. In addition, these payday loans often require a lump-sum repayment and other highly unfavorable terms that can result in these lenders inducing repayment by unethical means, such as rolling over existing loans into loans that can lead to ever increasing debt and fees.

In contrast to payday loans, CCBank’s loan programs with its FinTech partners are subject to significant regulatory scrutiny and oversight by the FDIC and the Utah Department of Financial Institutions; each of which requires us to closely monitor and appropriately manage all of our FinTech arrangements and loan products.

Are these relationships “Rent-a-Bank” schemes as coined by the media?2022-02-15T16:34:06+00:00

Although CCBank’s loan programs with national consumer loan FinTechs have been referred to by certain commentators and media outlets as “Rent-A-Bank schemes,” this characterization cannot be further from the truth. These programs are subject to significant FDIC and Utah Department of Financial Institution oversight and regulation. These unfortunate and frankly lazy names coined by those opposed to bank lending programs with FinTechs falsely imply that there is a lack of bank engagement in these programs, a complete outsourcing of the bank’s lending authority, and a lack of bank regulatory oversight over the programs—none of which is true. CCBank appropriately manages and oversees all our loan products and FinTech relationships.

What are key facts that I should know about the structure of these programs?2022-02-11T21:54:19+00:00

Like all federally insured banks, CCBank is highly regulated. As a Utah state bank, CCBank is regulated by both the FDIC and the Utah Department of Financial Institutions, and our programs are routinely examined and rigorously scrutinized. FinTechs are also subject to examination by our regulators under federal law.

All of CCBank’s FInTech programs are required to be in compliance with a broad range of applicable federal and Utah laws and regulations. CCBank is committed to exceptional compliance with applicable law and regulation and in furtherance of this goal, we utilize the services of highly regarded legal advisors with deep expertise and specialization in advising FinTech lending programs. We also regularly consult with industry-leading consumer lending compliance professionals to ensure that our compliance performance remains strong.

CCBank is deeply involved in the operations and compliance of each of our FInTech programs. To maintain this level of involvement, we have built our human resource talent pool specifically for these lending programs, and we have intentionally grown our internal teams to address the enhanced oversight that these programs demand.

CCBank ensures that consumer payment performance for all our higher-interest consumer loan products report to one or more of the major credit bureaus so that customers who make on-time payments can build or improve their credit record and continue toward what we call the “path to prime.”

Additionally, many of our loan products available through our FinTech programs offer a variety of incentives for on-time payments, including a reduction of the interest rates as well as potential credit-limit increases.

The cost of the loan and repayment terms are clearly disclosed to all borrowers in accordance with applicable disclosure requirements prior to loan proceeds being disbursed to the borrower.

Why are these loans offered at a higher interest rate?2022-02-15T16:19:00+00:00

The loan products offered through our FinTech arrangements are not low-cost loans— and we realize a high-interest loan product may not be an ideal or cost-effective way for some consumers to borrow money to cover immediate or even catastrophic expenses.  However, there is an unquestionably strong demand for these types of loans, and because of the regulatory oversight to which we are subject, a loan through a bank-FinTech relationship at a lower interest rate is a far better alternative for the consumer than a payday loan or other credit product from a higher cost, less regulated lender. Nevertheless, because these borrowers often have non-prime credit scores, these loans come with substantially increased risk and therefore often higher cost to CCBank. The interest rates offered on these loans are commensurate with the risk and cost to our community bank.

Sample Loan Product2022-03-04T18:30:37+00:00

 

  1. Credit Karma; based on average charge of $34 on average transaction of $24 to be repaid within three days.
  2. CFPB; from 2017 lawsuit, the annual percentage rates for four tribal lenders’ installment loan products was between 440% and 950%
  3. FTC and CFPB; based on title lenders charging average of 25% per month and typical two-week payday loan with a $15 per $100 fee.
  4. FTC; based on $83/month, 12-month Lease to Own (LTO) plan to purchase ~ $500 item and $39/week, 48-week LTO plan to purchase ~$600 item.
  5. Lend Academy; assumes $200 amount financed with $5 finance charge 7 days between the advance and employee’s regularly scheduled pay date.

Customer Feedback:  CC Connect