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The Rent-A-Bank Scheme

February 4, 2021
Payday and Other Small Dollar Loans
Policy & Legislation

Predatory lenders are making loans of 100% APR or more in states with limits of 36% or less by laundering loans through an out-of-state bank that is not subject to state interest rate limits. This is a rent-a-bank scheme.

Will these schemes make payday and high-cost lending legal everywhere? How can we protect our state interest rate limits? Why is this so important right now?

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