H.R. 1658 — SAFE Lending Act of 2025

This section amends the Electronic Fund Transfer Act (EFTA) to limit remotely created checks—i.e., checks (paper, electronic, or similar payment orders) not created by the account-holding financial institution and lacking the account holder's signature—by prohibiting their issuance except by a person designated in writing by the consumer specifically to their insured depository institution, with revocable designations and a ban on issuance in response to consumers exercising rights under federal consumer financial laws (adding new subsection (d) to §905, 15 U.S.C. 1693c). It further amends EFTA consumer liability provisions (§913, 15 U.S.C. 1693k) to (1) expand liability limits for unauthorized transfers to apply to any electronic fund transfer (not limited to preauthorized ones) and (2) treat voluntary electronic fund transfers repaying small-dollar consumer credit extensions (as defined in Truth in Lending Act §110(a)) as preauthorized transfers eligible for EFTA protections (adding §913(b)).

This section amends the Truth in Lending Act (TILA) by (1) inserting new section 110, which defines a "small-dollar consumer credit transaction" as consumer credit of up to $5,000 (or a higher amount as adjusted by the Bureau of Consumer Financial Protection [CFPB] to reflect changes in the Consumer Price Index for all urban consumers) extended pursuant to certain closed-end agreements payable in installments of less than 12 months, short-term open-end plans fully repayable within a defined time or upon a defined event, or other plans as determined by the CFPB—including any facilitation, brokering, arranging, or application-gathering—and requires lenders to register with the CFPB before extending such credit; and (2) directing that small-dollar consumer credit transactions conducted remotely (i.e., over the internet, by telephone, facsimile, mail, electronic mail, or other electronic means) or by national banks comply with the consumer's state of residence laws on annual percentage rates, interest, fees, charges, and related matters as determined by the CFPB. This section further amends the Electronic Fund Transfer Act by prohibiting any person from charging overdraft fees on prepaid accounts (i.e., as defined in CFPB regulations), authorizing financial institutions to decline transactions exceeding the account balance, and directing the CFPB to prohibit additional fees (beyond those in existing law) as needed to prevent unfair, deceptive, or abusive acts or practices and to enable consumers to understand and compare prepaid account costs.

This section establishes restrictions on lead generation in small-dollar consumer credit transactions (as defined in TILA §110(a)) by requiring any person facilitating, brokering, arranging for, or gathering applications for the distribution of sensitive personal financial information (i.e., social security number, financial account number, bank routing number, bank account number, or security or access code) to prominently disclose contact and identification information, including for service of process and domain registration. It prohibits such persons from engaging in those activities unless directly providing the credit to the consumer and clarifies that the provision does not limit the Consumer Financial Protection Bureau's authority to impose further restrictions or apply to (1) telecommunications services, Internet access services (as defined in 47 U.S.C. §231(e)), or Internet information location tools; or (2) transmission, storage, retrieval, hosting, formatting, or translation of communications without selection or alteration of content, except deletions consistent with the good-faith restriction protections of Section 230(c) of the Communications Act (47 U.S.C. §230(c)).

This section directs the Comptroller General of the United States, not later than 180 days after the date of enactment, to conduct a study regarding (1) the availability of capital on reservations of Indian Tribes and (2) the impact of small-dollar consumer credit extended through internet and non-internet means to members of Indian Tribes on their economic opportunity and wealth. In conducting the study, the Comptroller General must consult, as appropriate, with the Bureau of Consumer Financial Protection, the Board of Governors of the Federal Reserve System, the Director of the Bureau of Indian Affairs, federally recognized Indian Tribes, and community development financial institutions operating on Indian lands. The Comptroller General must submit the study to the specified congressional committees (i.e., the Senate Committees on Banking, Housing, and Urban Affairs and Indian Affairs; and the House Committees on Financial Services and Natural Resources).

This section directs the Director of the Bureau of Consumer Financial Protection to issue any final rules necessary to implement this Act and its amendments not later than one year after the date of enactment.