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September 03, 2020
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1 min read
CFA Warns the Proposed Federal Banking Rule Would Unleash Predatory Lending In All 50 States
Consumer Federation of America joined numerous advocacy organizations from across the country in submitting comment letters in vigorous opposition to a proposed rule from the Office of the Comptroller of the Currency (OCC). This proposed rule would encourage the spread of predatory loans by gutting the “true lender” doctrine that courts use to detect usury evasions. The OCC proposal would facilitate harmful, predatory “rent-a-bank” schemes where a non-bank lender launders its loan through a bank, which is exempt from state rate caps, in order to charge interest rates in excess of what a state legally allows a non-bank to charge. CFA urged the OCC to withdraw its proposal.
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