OCC rule gives predatory lenders green light to circumvent state interest rate caps
WASHINGTON, D.C. – Consumer Reports urged the Senate Banking Committee in a letter today to repeal a rule recently adopted by the Office of the Comptroller of the Currency (OCC) that enables predatory lenders to evade state interest rate caps by partnering with nationally chartered banks. These so-called “rent-a-bank” schemes are the subject of a Senate Banking Committee hearing today at 10am ET.
“The OCC’s misguided “true lender” rule gives predatory lenders the green light to circumvent state usury laws and prey on financially vulnerable consumers,” said Syed Ejaz, policy analyst for Consumer Reports. “No one should be offered a loan that buries them under a mountain of high interest debt. We need to rein in shady rent-a-bank schemes and enact reasonable limits on interest rates so borrowers are treated fairly and don’t get stuck in a never-ending cycle of costly debt.”
In addition to overturning the OCC rule, Consumer Reports is calling on lawmakers to adopt a federal usury cap modeled after limits already in place that protect service members from usurious interest rates.
See Consumer Reports’ letter to the Senate Banking Committee for more details.
Michael McCauley, michael.mccauley@consumer.org, 415-902-9537