ATLANTA--(BUSINESS WIRE)--FactorTrust, the alternative credit bureau, announces the launch of its LendProtect ATR (Ability to Repay), a comprehensive, innovative solution for informed lenders that will accelerate assessment of consumers’ ability to repay in preparation of anticipated regulation from the Consumer Financial Protection Bureau (CFPB).
The CFPB’s proposals under consideration are expected to require the short-term, small-dollar credit market to take new steps to ensure consumers can repay short-term loans, vehicle title loans, deposit advance products, certain installment loans and open-end loans. For each loan, lenders will need to take into account the consumer’s income, major financial obligations and borrowing history, while considering a 60-day “cooling off period” between loans.
As reported in FactorTrust’s latest Underbanked Index, 31 percent of applicants would be eligible to borrow after considering the proposed “cooling off” period and residual income requirements. However, applicant eligibility could reach as high as 40 percent, if lenders use alternative credit data to optimize underwriting decisions and dynamically adjust loan amounts, accommodating limited residual income.
Benefits for Short-Term Lenders
LendProtect ATR allows lenders to meet new compliance requirements while improving underwriting and account management practices. Utilizing FactorTrust’s proprietary data and analytics, LendProtect ATR quickly calculates residual income based on the requested loan amount and streamlines the integration of essential data sets. This means that lenders can validate income and living expenses, verify major financial obligations and identify other covered loans and borrowing behavior of consumers which may put them in the “cooling off” period. FactorTrust’s LendProtect ATR dashboard also gives lenders access to real-time transaction processing and decision support, application validation and residual income calculation.
“We always have been committed to providing lenders with innovative alternative credit data solutions and we have a keen understanding of what it takes for short-term lenders to succeed in today’s market. We take pride in providing our customers with real-world solutions, such as LendProtect ATR, that allow them to align with changing regulatory requirements and lend responsibly to deserving consumers,” states Greg Rable, FactorTrust CEO.
Lenders have trusted FactorTrust’s robust data and analytics capabilities to assess a consumers’ ability to repay for a decade, but LendProtect ATR was designed to help lenders demonstrate compliance with a verifiable view of consumers’ true ability to repay, in relation to CFPB proposals for consideration.
For guidance on how to leverage this solution, lenders should contact FactorTrust at 1-844-205-4111 (press 4) or sales@factortrust.com or visit www.FactorTrust.com.
About FactorTrust
FactorTrust, The Alternative Credit Bureau, helps lenders manage the credit lifecycle of underbanked consumers using unique alternative credit information not available from the Big Three bureaus, enabling them to offer non-prime consumers the credit they deserve. Nearly 100 million U.S. adults have non-prime scores. Leveraging the company’s credit information, lenders can more accurately predict future borrowing behavior, credit performance and risk scoring for this growing segment. Headquartered in Atlanta, the experienced FactorTrust team of predictive analytics specialists, statisticians and financial industry experts has delivered unique data and valuable insight to lenders throughout the U.S. for 10 years. For more information on the quarterly FactorTrust Underbanked Index or the company itself, visit www.FactorTrust.com.
