HR 3299, the so-called "Madden Fix," would reverse a court decision called Madden vs. Midland, which forbade banks from reselling loans to payday lenders if the loan's interest rate exceeded state limits. Rebecca Borne, senior policy counsel for the Center for Responsible Lending, said this bill would legalize what she called a "rent-a-bank" scheme. "It would permit non-bank predatory lenders to partner with banks, even superficial partnerships, to take advantage of banks' ability to pre-empt state law," she said. Sixteen states and the District of Columbia have laws that cap interest rates on short-term payday-type loans, and dozens more cap rates on longer-term loans.
Friday, February 16, 2018