Small Business Groups Applaud Congressional Effort to Stop Predatory Lenders

Main Street Alliance, a coalition representing small businesses around the country, is cheering the introduction of federal legislation that would rein-in predatory lenders that prey on small businesses as well as individuals.

“Small businesses struggling with the ongoing COVID crisis are at risk to predatory rent-a-bank schemes who prey on their dire need for access to capital. We applaud Senator Van Hollen, Senator Brown and Representative Garcia for introducing resolutions to overturn the OCC’s horrible fake lender rule, which protects predatory small business lenders that are trying to evade state laws that protect small businesses,” said Main Street Alliance Government Affairs Director Didier Trinh. “We must protect our small businesses during the incredibly vulnerable time. Rent-a-bank schemes and predatory lenders should not have the protection of federal regulation.”

Consumer groups have been pressuring Congress for the change in a rule ushered in by the Trump Administration.

“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.