More than 300 Groups Call on Congress to Take Action on Predatory Loans, Rescind “Fake Lender” Rule

With just a few days left before a crucial deadline, CFA joined a broad coalition of 324 organizations from 49 states and the District of Columbia calling for Congress to eliminate a Trump-era regulation that took effect in December and could “unleash predatory lending in all fifty states.” The rushed “fake lender” rule, which was issued by the Office of the Comptroller of the Currency (OCC), would facilitate “rent-a-bank” schemes whereby predatory lenders launder their loans through a few rogue banks, which are exempt from state interest rate caps, through a superficial partnership meant to evade critical predatory lending rules.

“Congress must act to overturn this dangerous rule that will unleash predatory lending in all 50 states. Predatory lenders prey on veterans, small businesses, and communities of color, luring them into harmful loans that strip these consumers of hard-earned capital. Congress can, and should, stop these lenders by overturning the ‘fake lender’ rule,” said Rachel Gittleman, Financial Services Outreach Manager with Consumer Federation of America.

As was done more than a dozen times under President Trump, this Congress could use the Congressional Review Act (CRA) to rescind recently finalized regulations, including the OCC’s “fake lender” rule, with just a majority vote in both chambers, limited debate, no filibuster, and the president’s signature. However, to be considered, there is a strict…