In a September 3 letter to Acting Comptroller of the Currency, Brian Brooks, the Coalition for Responsible Lending wrote:
We oppose the OCC’s proposed rule to permit lenders to use the rent-a-bank model to avoid North Carolina’s rigorously enforced interest rate cap. The OCC’s proposed rule will let predatory lenders off the hook for charging interest and fees in excess of what is legally allowed in our state. This rule, if implemented, will bring back the harms associated with predatory lending and limit our state’s ability to protect our consumers from those harms. This rule will not offer financial inclusion to the poor, as the OCC’s Acting Comptroller suggests. Instead, making these loans available to low income and low wealth people in North Carolina will trap the borrowers in a cycle of debt. It will also see a slew of other harms, ranging from car repossession, assessment of bank overdraft fees; negative impact on borrowers’ credit scores; reduced ability to pay for food, rent, and utilities; wage garnishment; and even bankruptcy. This type of credit is predatory. Payday lenders put borrowers into a worse situation and ruin their credit and ability to borrow at lower interest rates.