Clarity in Lending Act

The Clarity in Lending Act creates a "safe harbor" for small-dollar credit products ($3,500 or less) that meet specific requirements, protecting covered entities (banks, credit unions, and their contractors) from civil penalties and private lawsuits. It requires repayment terms longer than 45 days, fully amortized payments, no rollovers, and prohibits prepayment penalties, overdraft fees, and nonsufficient funds fees. The bill also clarifies the definition of "abusive" acts for the Bureau of Consumer Financial Protection, mandates a 180-day cure period before enforcement actions, and limits look-back periods for penalties. This legislation directly affects small-dollar lenders and the Bureau's enforcement practices while maintaining consumer protections.