WASHINGTON, DC — The U.S. House Committee on Financial Services is scheduled to vote as soon as Wednesday on a bill (H.R. 7866) that would hamper states’ ability to stop out-of-state lenders from charging 100%+ APR to their residents. Identical companion legislation has been introduced in the Senate as S. 3889.
“This bill would exacerbate the affordability crisis by exposing more Americans to unaffordable loans. It would deprive states of their well-established authority to determine the usury limit for their residents. It should be roundly rejected,” said Nadine Chabrier, senior policy counsel at the Center for Responsible Lending (CRL).
This legislation would remove a legal tool that states increasingly use to crack down on “rent-a-bank” schemes, in which rogue state-chartered banks domiciled in states without interest rate caps provide a front for non-bank lenders to make loans at interest rates that violate the rate cap of consumers in another state.
Additional resources on H.R. 7866 / S. 3889:
- One-page primer
- CRL letter in opposition
- Letter from nearly 120 consumer, civil rights, and community organizations and academics that oppose the legislation
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Press Contact: Matthew Kravitz matthew.kravitz@responsiblelending.org