Skip to main content

Search form

OCC Finalizes Rule That Threatens to Bring Payday Lenders Back into North Carolina

October 27, 2020
Payday and Other Small Dollar Loans
Payday Loans
Policy & Legislation

October 27, 2020

Durham, NC — Despite widespread opposition from advocates and state officials, the OCC issued a final rule today that would allow the banks they regulate to participate in “rent-a-bank” partnerships with predatory lenders, encouraging the return of 400% interest debt traps to North Carolina.

After closing down illegally operating payday and car title lending in North Carolina in 2006, North Carolina saves some $457 million annually in fees that would otherwise be drained from those families with the fewest resources.

Thirty-one North Carolina organizations joined a comment to the Office of the Comptroller of the Currency (OCC) in September that called for withdrawal of the OCC’s proposed so-called “true lender” rule. The groups, which include faith organizations, credit unions, and nonprofits that provide services and advocacy for low-income families, older people and people with disabilities, lay out how the rule would harm the communities they serve. It would let predatory lenders pay banks a fee to pose as the “true lender" in their dealings so that the predatory lenders can ignore North Carolina’s hard-won interest rate cap on payday loans.

Center for Responsible Lending (CRL) Director of North Carolina Policy Rochelle Sparko issued the following statement:

Our state saw the destruction predatory lenders caused and chased them out of our borders in 2006. It would be a great shame to see them come back, set up shop in our shopping centers, and put their wealth-stripping machines back into service, especially in the communities of color where they locate most frequently and where families are devastated by the COVID-19 pandemic and its economic consequences.

The OCC has shown complete disregard for working families in this nation and our state, putting them at greater risk of a predatory lending practice that is known to drive people into financial straits. Our North Carolina leaders must do everything they can to prevent this toxic product from re-entering our state.


Press Contact: