Following bipartisan votes in the House and Senate, President Biden recently signed a bill ending a Trump-era rule that allowed payday lenders to circumvent state interest rate caps.
Pro-consumer legislators are applauding the victory:
U.S. Senator Chris Van Hollen (D-Md.), a member of the U.S. Senate Committee on Banking, Housing, and Urban Affairs, and Committee Chairman Sherrod Brown (D-Ohio) applauded President Biden’s signing of their resolution into law to repeal the Trump Administration’s so-called True Lender Rule through the use of the Congressional Review Act. This regulation, finalized in the last months of the prior Administration, allows predatory lenders to skirt state laws meant to curb interest rates on loans and opens the door for these lenders to prey on vulnerable consumers. According to the Center for Responsible Lending, this rule has allowed predatory lenders to make loans at 100% APR or more in states with limits of 36% or less by laundering loans through an out-of-state bank not subject to state limits.
“Americans deserve consumer protections that work for them — not for special interests and predatory payday lenders. Today’s action to strike down the Trump ‘Rent-A-Bank’ rule will help prevent predatory lenders from ripping off consumers and charging loan-shark rates under deceptive terms. I vowed to use every tool at our disposal to reverse the damage done by the Trump Administration in instating this rule. Today, we’ve delivered on that promise,” said Senator Van Hollen, a member of the U.S. Senate Committee on Banking, Housing, and Urban Affairs..
“Today, we showed the American people that we are on their side,” said Senator Brown, Chairman of the U.S. Senate Committee on Banking, Housing, and Urban Affairs. “This Trump Administration rule that allowed predatory lenders to line their pockets on the backs of hardworking families has been overturned. I applaud the Biden Administration and my colleagues in the House and Senate for coming together to crack down on predatory lenders.”
The legislation was supported by a wide array of stakeholder and consumer protection groups including: a bipartisan group of 25 State Attorneys Generals, the Conference of State Bank Supervisors, the Faith for Just Lending Coalition, Center for Responsible Lending, National Consumer Law Center (on behalf of its low-income clients), Consumer Federation of America, the Military Officers Association of America, the…