Advocates Welcome New Bank Regulator, Call on Congress to Repeal “Fake Lender” Rule

Advocates welcomed reports that Treasury Secretary Janet Yellen plans to appoint a new acting head of the Office of the Comptroller of the Currency (OCC), replacing Blake Paulson, in light of the highly deceptive and false claims that the agency, under Paulson’s leadership, put forward as Congress debates overturning the OCC’s “fake lender” rule. The fake lender rule will enable a massive expansion of predatory lending in all 50 states if the rule is permitted to remain in effect. Congress must pass the Congressional Review Act (CRA) resolution introduced by Senators Sherrod Brown (D-OH), Chris Van Hollen (D-MD), S.J. Res. 15, and Rep. “Chuy” García. H.J. Res. 35, to overturn the fake lender rule.

Even with a new acting comptroller and eventually a permanent one, advocates stressed the urgency of Congress repealing the fake lender rule. “Congress must repeal the OCC fake lender rule because it is doing active harm right now, defending a predatory business model that destroys small businesses, homes, and lives,” said Lauren Saunders, associate director of the National Consumer Law Center. “It could easily be two years or more before the rule could be repealed through rulemaking, and families, especially Black and Brown and low-income families, cannot wait.”

Predatory small business lenders are using the fake lender rule today to defend a 268% APR rate on loans totaling $67,000 to a restaurant owner in New York, where the criminal usury rate is…