For Calhoun at the Center for Responsible Lending, the stakes are clear. An approval would lead to a normalization of three-digit APRs like the one Patrick is struggling with years later with no end in sight. He says it would not only open the floodgates to other fintech lenders that want to become banks — it would also push current national banks to ratchet up their APRs to compete with them.
He worries interest rates could rise across the board, potentially sparking a Great Recession-like default crisis in an already shaky economy.
“This is not an incremental change,” Calhoun says. “This is a let’s-blow-up-existing-standards change.”