WASHINGTON––A coalition of consumer advocates has filed comments with the Federal Deposit Insurance Corporation, including a petition signed by more than 44,500 people along with a letter describing hundreds of consumer complaints, urging it to consider Transportation Alliance Bank’s “predatory rent-a-bank lending” when the agency assesses the bank’s performance in meeting community needs under the Community Reinvestment Act.
The groups called on the FDIC, as it prepares to conduct its CRA exam with the to Utah-based TAB Bank, to factor in the fact it works with EasyPay Finance to “snare consumers into predatory loans for auto repairs, tires, furniture, and even pets.”
The petition, filed by the Stop the Debt Trap coalition, states “the typical predatory loan borrower will make payments for months that go mostly to interest and do little to pay off the loan,” and called on the FDIC to stop “Transportation Alliance Bank and any other bank from fronting for predatory lenders evading state interest rate limits.”
In addition to the petition, the Coalition submitted a CRA comment letter to the FDIC describing what it said are hundreds of consumer complaints filed against TAB Bank’s lending partner, EasyPay Finance. The letter asserts that EasyPay originates loans in TAB Bank’s name and the bank is responsible for its conduct.
‘Extensive Evidence’
“The FDIC should downgrade TAB Bank’s CRA rating in light of the extensive evidence of the abusive lending and potential violations of the law that it is facilitating,” the letter states. “High-cost credit that extracts wealth and burdens borrowers in debt does not meet credit needs in a responsible manner and must be penalized on CRA exams.”
In its comment letter, the coalition further 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.”
A copy of the letter and the names of the groups that have signed it can be found here.