WASHINGTON, D.C. – With just days left in President Trump’s Administration, a federal government agency has been moving forward with a proposal that could essentially force banks to finance payday and predatory installment lenders charging annual interest rates above 100% along with a range of other companies that pose risks to banks and the public. The Office of the Comptroller of the Currency (OCC) yesterday ended its comment period on the proposed rule, officially titled “Fair Access to Financial Services,” which is expected to limit banks’ ability to decide not to serve certain industries. The OCC could issue a final rule before President-elect Biden’s Inauguration on January 20th.
The Center for Responsible Lending (CRL) led a coalition of consumer, faith, community, and civil rights groups in submitting a comment letter strongly opposing the proposal, writing: “As an initial matter, the OCC fails to find authority for this proposal.” The groups also state:
Our comment focuses on the unmistakable and absolute conflict between, on one hand, requiring banks to engage in safe and sound lending practices, adhere to consumer protections, avoid discriminatory practices, and invest in their communities, while, on the other hand, pressuring them to finance lenders whose models are driven by unaffordable lending. Our comment further discusses the reality of reputational risk and how banks’ facilitation of payday lending has heightened that risk in the past and promises to continue to do so going forward.
The letter was submitted by the Center for Responsible Lending along with the following national and state groups: Americans for Financial Reform Education Fund, Beneficial State Foundation, Better Markets, Change to Win, Consumer Action, Consumer Federation of America, Consumers for Auto Reliability and Safety, The Leadership Conference on Civil and Human Rights, MyPath, NAACP, National Association of Consumer Advocates, National Community Reinvestment Coalition, National Consumer Law Center (on behalf of its low income clients), Public Good Law Center, U.S. PIRG, Alaska PIRG, Arizona PIRG Education Fund, Arkansans Against Abusive Payday Lending, California League of United Latin American Citizens (LULAC), California Reinvestment Coalition, Center for Economic Integrity (AZ), Coalition on Homelessness & Housing in Ohio, Consumer Federation of California, Delaware Community Reinvestment Action Council, Inc., Faith Voices of SW Missouri, Heartland Alliance (IL), Housing and Economic Rights Advocates (HERA) (CA), Illinois PIRG, Jacksonville Area Legal Aid, Inc., Missouri Faith Voices, New Economics for Women (CA), New Economy Project (NY), New Jersey Citizen Action, North Carolina Justice Center, THE ONE LESS FOUNDATION (PA and CO), SC Appleseed Legal Justice Center, SC NAACP, Shoreline Study Center (CA), Statewide Poverty Action Network (WA), Texas Appleseed, Tzedek DC (DC), Virginia Citizens Consumer Council, Virginia Organizing, Virginia Poverty Law Center, VOICE-OKC (OK), Wildfire: Igniting Community Action to End Poverty in Arizona, and WISPIRG.
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