Customer and Civil Rights Groups Urge Federal Banking Regulator to prevent Rent-a-Bank Cash Advance Schemes
Groups Highly Oppose OCC Proposal that Would Avoid State Speed Caps to permit High-Cost Predatory Loans
Washington, D.C. – The Center for Responsible Lending, nationwide Consumer Law Center, Leadership Conference on Civil and Human Rights, NAACP, nationwide Association for Latino Community Asset Builders, People in the us for Financial Reform, Consumer Federation of America, Public Citizen, and U.S. PIRG, sent a very good message late yesterday up to a federal bank regulator, any office for the Comptroller and Currency (OCC), opposing a proposed guideline that could encourage rent-a-bank schemes that allow loans of 100% APR or maybe more in states that prohibit high-cost loans and even mortgages as much as 138per cent that drive small company owners into property property foreclosure. The teams argued that it could be made by the proposal easier for non-bank lenders to launder cash through banking institutions and unleash a flood of predatory loans.
The 55-page remark states that the OCC does not have authority underneath the nationwide Bank Act to authorize non-banks to charge usurious prices, and that the OCC has didn't proceed with the demands for the 2010 Dodd-Frank Act before preempting state legislation. The remark additionally criticizes the agency for neglecting to think about the risks the proposal poses to customers and smaller businesses, specially those people who are financially susceptible. Also, the OCC is neglecting to stop a rent-a-bank scheme by the OCC-supervised savings that are federal, Axos Bank, that is allowing predatory loans by World company management. The remark states to some extent:
“The proposed guideline would allow non-bank that is predatory to launder their loans through banking institutions to evade state rate of interest caps. The proposition is away from OCC’s authority that is statutory it is perhaps maybe not justified by any proof of problematic effect on genuine bank operations; as well as the OCC has neglected to think about the strong likelihood that the proposition will unleash a torrent of predatory financing.