The Center for Responsible Lending (CRL), the Consumer Federation of America (CFA), the National Consumer Law Center (NCLC) (on behalf of its low-income clients), and the National Fair Housing Alliance (NFHA) submitted a comment on the Proposed Interagency Guidance on Third-Party Relationships with an emphasis the following points:

  • A handful of FDIC-supervised banks are engaged in high-cost rent-a-bank schemes, which the FDIC should immediately prohibit. This proposed guidance, by its silence, could encourage more schemes.
  • Other OCC- and FDIC-supervised banks are enabling high-cost credit features on non-bank deposit accounts that potentially involve violations or evasion of state lending laws or the CFPB’s prepaid accounts rule.
  • The guidance should explicitly provide that banks should not engage in partnerships that enable non-banks to claim they are not subject to state licensing or consumer protection laws;
  • At a minimum, the guidance should explicitly:
    • deem bank involvement in lending that exceeds state interest rate limits that apply to non-banks a “critical activity”;
    • declare that loans exceeding a fee-inclusive 36% APR pose especially high risks;
    • provide that when loans exceed MLA 36% APR, the federal banking supervisor will directly examine the third-party partner and charge the bank for the cost of those examinations.
  • Guidance addressing information security should be generally applicable not only to data aggregators but to all companies with which a bank shares data, including consumer reporting agencies (CRAs) and other data gathering entities (e.g., data brokers such as Acxiom).