COMPONENTS OF A TEST THAT MIGHT TRIGGER A
NET-TANGIBLE-BENEFIT REQUIREMENT
Most restrictive
Measuring
Period
Metric Type
Example Using “Past 12 Months” as the
Measuring Period
Least restrictive
Borrower’s
lifetime
Days in
Product
Subject loan must meet NTB requirement if borrower
has had a PDL outstanding for ____ days within the past
12 months
Past 12
months
Discrete
Loans
Subject loan must meet NTB requirement if borrower
has obtained ____ PDLs within the past 12 months
Past 90 days
Waiting
Period
Subject loan must meet NTB requirement if borrower
has obtained ____ or more consecutive PDLs within the
past 12 months (“consecutive” loan defined as any PDL
not preceded by a waiting period of at least ____ days)
Past 45 days
Default
Subject loan must meet NTB requirement if borrower
has defaulted on a PDL within the past 12 months
Previous loan
Extended
Payment Plan
Subject loan must meet NTB requirement if borrower
has requested EPP within the past 12 months
No “lookback” period
Refinance
Subject loan must meet NTB requirement if borrower
has refinanced a PDL within the past 12 months
BORROWER’S REPRESENTATIONS THAT MIGHT
SATISFY AN NTB REQUIREMENT
• Compared to an existing PDL or other consumer loan, the subject PDL:
Improve Credit
Terms
• lowers APR;
• extends maturity date; or
• reduces monthly debt service.
• Borrower is unable to meet fixed expenses because borrower’s income has varied due to:
• self-employment;
• commission; or
Smooth Cash Flow • overtime.
• Borrower has experienced a variable expense, the non-payment of which would cause:
• loss of income (e.g., repair of a car needed to commute to work);
Avoid Undesirable • embarrassment or inconvenience (e.g., back-to-school clothes or supplies); or
Result of Non• default penalties (e.g., late fee, NSF fee, or utility re-connect fee).
Payment
EXAMPLE OF A NET-TANGIBLE-BENEFIT
WORKSHEET
Loan Information Statement
By initialing by the one or more items below, the borrower hereby represents that he or she will receive the
following benefit(s) by obtaining this payday loan:
____ Lower my APR on an existing payday loan from ____% to ____%.
____ Extend the due date of an existing payday loan from _________ to __________.
____ Reduce the payment amount of an existing payday loan from $__________ to $__________.
____ Allow me to match my income and expenses this month despite a variance in my income due to (select
all that apply): ____ self-employment income; ____ commissions; ____ overtime; other (explain)
__________________________________________.
____ Allow me to pay a variable expense, the non-payment of which would cause (select all that apply): ____
loss of income; ____ embarrassment or inconvenience; ____ default penalties; or other (explain)
___________________________________________.
___________________
Borrower
_________________
Date