WASHINGTON–The Senate this week will hold a hearing on so-called “rent-a-banks,” an issue on which a large number of consumer groups and state attorneys general have been calling for action.
At issue is the “fake lender” rule put in place by the national bank regulator the Office of the Comptroller of the Currency, which became effective in December 2020.
The rule “protects these predatory lending ‘rent-a-bank’ schemes,” said the National Consumer Law Center. “The rule prevents courts from looking beyond the fine print to uncover who is running and profiting off the loan program and is the ‘true lender,’ as courts did for challenges to payday loan rent-a-bank schemes in the 2000s.”
The hearing will be held on Wednesday at 10 a.m. ET, a live broadcast of which can be viewed here.
“Predatory lenders are making loans approaching 200% APR in states where that rate is illegal,” the NCLC said.
‘Only a Few Days Left’
The NCLC noted Congress has “only a few days left to approve a resolution under the Congressional Review Act to overturn the fake lender rule and restore states’ right to protect their residents.”
Appearing during the virtual hearing as witnesses will be:
- Josh Stein, Attorney General, North Carolina
- Lisa Stifler, director of State Policy, Center for Responsible Lending
- Dr. Frederick D. Haynes, III, senior pastor, Friendship-West Baptist Church, Dallas, Texas
- Brian Brooks, former acting Comptroller of the Currency
- Dr. Charles Calomiris, Henry Kaufman Professor of Financial Institutions, Columbia Business School