Taking on the Predators at TAB Bank
So-called bank innovator partners with predatory lenders charging 189% interest rates
A coalition of consumer groups is calling on the Federal Deposit Insurance Corporation (FDIC) to take regulatory action against Utah-based TAB Bank for what the groups call “predatory” lending practices.
The groups, including Consumer Federation of America (CFA), Americans for Financial Reform (AFR), Center for Responsible Lending (CRL), and National Consumer Law Center (NCLC) sent a comment letter to the FDIC detailing consumer complaints against TAB’s lending partner, EasyPay Finance and also submitted a petition signed by more than 44,000 individuals calling for FDIC action to rein-in the bank’s practices.
In its comment letter, the coalition argues: “In assessing whether TAB Bank is appropriately serving its communities, the FDIC should consider not merely access to credit but also the quality of credit extended. Predatory credit at high interest rates that borrowers cannot afford to repay, credit designed to evade state interest rate laws, credit that is the result of deceptive practices, and credit that leads to violations of debt collection, credit reporting, and other laws does not meet the convenience and needs of communities.”
The petition spells out the predatory practices of TAB’s partner, EasyPay Finance. EasyPay uses TAB bank to originate loans in order to evade state interest rate caps. This allows EasyPay to charge interest rates on auto repair and other loans of up to 189%.
Steered Into Debt: How EasyPay Finance Traps Consumers in High Interest Loans
Car repair loans with EasyPay carry rates up to 199%
The petition notes that “the typical predatory loan borrower will make payments for months that go mostly to interest and do little to pay off the loan,” and urges the FDIC to stop “Transportation Alliance Bank and any other bank from fronting for predatory lenders evading state interest rate limits.”
MORE ON TAB Bank’s Predatory Practices:
Social Media Money Laundering
How a bank charging 189% interest explains its business model
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Originally published at https://original.newsbreak.com.