Public Interest Research Group Calls for Repeal of Trump-era Rule Creating Payday Lending Loophole

With just a few days left before a crucial deadline, a broad coalition of organizations is calling for Congress (letter) 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 acting director of the obscure but powerful national bank regulator, 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.

“The OCC’s so-called “true” lender rule allows predatory lenders to trap vulnerable consumers in a debt trap by evading state protections to cap interest rates that have existed since the time of the American Revolution. This “fake lender” rule needs to be overturned to prevent these lenders from enabling 179% or higher loans to consumers, including those in our most vulnerable communities, like low-income families and borrowers of color.” said Lucy Baker, Consumer Program Associate for PIRG.

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…