9/8/20-Proposed Federal Banking Rule Would Unleash Predatory Lending In All 50 States
- September 08 2020
- By: info@njcfe.org
- 0 Comment
Proposed Federal Banking Rule Would Unleash Predatory Lending In All 50 States
September 4, 2020 | consumerfed.org
Washington D.C. – Yesterday, (9/4) the Consumer Federation of America joined numerous advocacy organizations from across the country in submitting comment letters in vigorous opposition to a proposed rule from the Office of the Comptroller of the Currency (OCC). This proposed rule would encourage the spread of predatory loans by gutting the “true lender” doctrine that courts use to detect usury evasions, gravely undermining state interest rate caps created to protect residents from high-cost loans. The OCC proposal would facilitate harmful, predatory “rent-a-bank” schemes where a non-bank lender launders its loan through a bank, which is exempt from state rate caps, in order to charge interest rates in excess of what a state legally allows a non-bank to charge. CFA urged the OCC to withdraw its proposal in individual comments and in a separate joint comment letter with 12 consumer and civil rights groups. CFA also joined a shorter comment letter submitted by more than 100 community based organizations across the nation.