Consumer and Civil Rights Groups Urge Federal Banking Regulator to avoid Rent-a-Bank Cash Advance Schemes

Consumer and Civil Rights Groups Urge Federal Banking Regulator to avoid Rent-a-Bank Cash Advance Schemes

Groups Highly Oppose OCC Proposal that Would Avoid State Speed Caps to permit High-Cost Predatory Loans

Washington, D.C. – The Center for Responsible Lending, nationwide customer Law Center, Leadership Conference on Civil and Human Rights, NAACP, nationwide Association for Latino Community Asset Builders, People in the us for Financial Reform, customer Federation of America, Public Citizen, and U.S. PIRG, delivered a very good message late yesterday to a federal bank regulator, work associated with Comptroller and Currency (OCC), opposing a proposed guideline that could encourage rent-a-bank schemes that allow loans of 100% APR or maybe more in states that prohibit high-cost loans and even mortgages as much as 138per cent that drive small company owners into property foreclosure. The groups argued that it could be made by the proposal easier for non-bank lenders to launder cash through banking institutions and unleash a flood of predatory loans.

The 55-page remark states that the OCC does not have authority underneath the National Bank Act to authorize non-banks to charge usurious prices, and therefore the OCC has did not proceed with the demands for the 2010 Dodd-Frank Act before preempting state legislation. The remark additionally criticizes the agency for failing woefully to look at the dangers the proposition poses to customers and smaller businesses, particularly those who are economically susceptible. Also, the OCC has already been neglecting to stop a rent-a-bank scheme by the OCC-supervised savings that are federal, Axos Bank, which will be allowing predatory loans by World company management. The remark states in part:

“The proposed guideline would allow non-bank that is predatory to launder their loans through banking institutions to evade state rate of interest caps. […]