Video highlights, below, on the harms of predatory rent-a-bank schemes
WASHINGTON, D.C. – Today, the U.S. Senate Committee on Banking, Housing, and Urban Development held a hearing, “The Reemergence of Rent-a-Bank?,” focused on legislation to rescind a bank regulator rule that facilitates this predatory lending scheme. The regulation, issued by the Office of the Comptroller of the Currency (OCC), can be eliminated through a legislative tool that prevents the possibility of a Senate filibuster, but that action must be taken before an upcoming deadline in May.
Video highlights of the hearing:
- Senator Elizabeth Warren (D-Mass.) grills former OCC Comptroller Brian Brooks on how he allowed rent-a-bank loans of 90%+ APR, in violation of the law
- CRL Director of State Policy Lisa Stifler opening testimony on "the single greatest threat to the ability of states to protect their residents from payday and other high-cost loans."
- Ms. Stifler references rent-a-bank loans of 268% APR charged to the owner of a small restaurant in New York, in violation of the law
- Exchange between Senator Raphael Warnock (D-Ga.) and Dr. Frederick Haynes, both pastors
- Senator Tina Smith (D-Minn.) and & Dr. Frederick Haynes connect predatory lending targeting Black and brown communities to history of redlining
- Opening testimony from Dr. Haynes
- Exchange with Senator Jack Reed (D-R.I.), Dr. Haynes, and Stifler on how predatory loans can cost people their car, house, access to banking services, mental health, and more.
- “This decision about what’s in the interest of North Carolina consumers…. It’s not for the OCC to make…. We want a shortage of high-cost illegal harmful loans. That's a good thing and that's a decision our state has made.” -North Carolina Attorney General Josh Stein
- AG Stein on harm of OCC rule to states’ ability to protect their residents
- Payday loan borrower's experience in debt trap shows risk of rent-a-bank, as described by AG Stein
- AG Stein on OCC’s aggressive preemption of state consumer protection laws that precipitated the 2008 financial crisis.
CRL Director of State Policy Lisa Stifler said, "Simply put, this rule facilitates loans illegal under state law – not just any loans but ones reaching 200 and 300% APR. That’s the decision here – siding with illegal lending practices or standing up against them. We urge Congress to stand up against them and repeal the OCC’s rule."
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