WASHINGTON–Ahead of National Love Your Pet Day on Feb. 20, a coalition of consumer groups have launched a campaign to stop one bank from making what they call “predatory puppy loans.”
Specifically, the Stop the Debt Trap coalition said it is teaming up with animal welfare advocates to launch a campaign to stop Transpiration Alliance Bank (TAB) from making predatory puppy loans, many of which it said go to buy puppies from puppy mills.
“At pet stores across the country, Transportation Alliance Bank is helping predatory lender EasyPay Finance evade state interest rate laws and make pet loans at 130% to 189% APR– rates that are illegal in most states for EasyPay and other lenders that are not banks,” the coalition said in a statement. “Consumer and animal welfare advocates are calling for TAB Bank to stop helping EasyPay gouge consumers with these loans and for the Federal Deposit Insurance Corporation to stop TAB Bank from facilitating this usury.”
According to the organization, the campaign includes:
- A Feb. 15 rally with the Utah Humane Society at the statehouse in Salt Lake City to spotlight TAB Bank’s role in financing predatory puppy loans
- A Feb. 17 social media storm – using #PredatoryPuppyLoans, #PredatoryTABbank and #LoveYourPetDay
- An effort to collect stories from people impacted by predatory puppy loans
- A focus on how predatory financing promotes the sale of puppy mill dogs
- A petition to urge the FDIC to stop TAB Bank and other banks from helping nonbank lenders disguise their loans as bank loans that are exempt from state interest rate limits
- Work to broaden support for the Veterans and Consumers Fair Credit Act, which would set a national 36% interest rate cap
Triple-Digit Loan Rates
“EasyPay offers financing for purchases at pet stores, auto mechanics, furniture stores and other retailers at rates ranging from 130% to 189% APR,” the Stop the Debt Trap Coalition said. “In 32 states where those rates are illegal, EasyPay launders its loans through TAB Bank, headquartered in Utah, to disguise the loans as bank loans that are exempt from state rate caps. This is a practice often referred to as a ‘rent-a-bank’ scheme. In states that allow these high rates, EasyPay extends financing directly.”
The coalition alleged that hundreds of consumers have submitted complaints about Easy Pay, which is owned by Duvera Billing Services, to the CFPB and BBB.
“The harmful ‘rent-a-bark’ model is being used by predatory payday and installment lenders to make triple-digit interest rate loans to those looking to bring puppies and other pets home. TAB Bank must be stopped from fronting for these loans that are illegal across the country,” said Rachel Gittleman, financial services outreach manager at Consumer Federation of America.
“TAB Bank is misusing its bank charter by fronting for abusive loans that bleed consumers dry,” added Nadine Chabrier, policy and litigation counsel at the Center for Responsible Lending. “Responsible merchants should stop peddling predatory EasyPay loans and the FDIC should end TAB Bank’s participation in this scheme.”
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