WASHINGTON, D.C. – Today, the U.S. House of Representatives – following the Senate’s lead – passed, on a bipartisan basis, legislation that will curb the spread of predatory loans carrying annual interest rates near or above 100 percent. The bill, S.J. Res. 15, does this by rescinding a rule, issued late last year by the Office of the Comptroller of the Currency (OCC), which facilitates “rent-a-bank” schemes aimed at evading state usury laws. As the White House has already indicated its support for the bill, it is now expected to be signed into law within the next few days.
“Eliminating this harmful OCC rule will prevent more people from being exposed to high-interest loans that pull borrowers down deep into debt and despair,” said Center for Responsible Lending (CRL) Director of Federal Campaigns Graciela Aponte-Diaz. “Nixing the rule will curb the spread of predatory loans that target Black, Latinx, and low-income individuals – many of whom are struggling from the economic downturn. This action will allow states to protect their residents by enforcing their state interest rate laws.”
Aponte-Diaz added, “In addition to eliminating the rule through this bill’s enactment, it is imperative that federal banking regulators stop supervised banks from engaging in ongoing rent-a-bank schemes.”
Additional background on this measure can be found in congressional testimony from Aponte-Diaz and in this blog post authored by CRL and published by Brookings earlier this week.
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Press Contact: matthew.kravitz@responsiblelending.org