Attorney General Becerra Condemns OCC Proposal to open up the Floodgates for Predatory Lending and Rent-a-Bank Schemes

SACRAMENTOР’ “ California Attorney General Xavier Becerra today, joining a coalition of 24 lawyers basic, presented a remark page opposing any office for the Comptroller regarding the Currency в„ўs (OCC) proposed True Lender Сњ Rule (Proposed guideline). This ruleР’ would allow predatory financing byР’ permitting non-bankР’ loan providers to disregard state interest-rate caps on consumerР’ loansР’ just by partnering with nationalР’ banking institutions, whichР’ areР’ exemptР’ under federal legislationР’ from state interest-rate caps.Р’ TheseР’ partnershipsР’ areР’ referred to as “rent-a-bank”Р’ schemesР’ as well as the OCC’s Proposed Rule would makeР’ themР’ legal.Р’

it is just one more attemptР’ that is blatant the Trump management to let predatory lendersР’ ignoreР’ state rules that protect ourР’ hardworking families, СњР’ stated Attorney General Becerra. It is because clear as time “ ill-intentioned loan providers will need advantage that is full of ruleР’ to trap vulnerable customers inР’ high-costР’ loansР’ and profitР’ fromР’ their failure to settle. We’re urging the OCC to withdraw its guideline, andР’ focus on providingР’ reasonable access to financial servicesР’ in place of helpingР’ predatory lendersР’ gouge struggling Us citizens. Сњ

States have long relied for a guideline referred to as theР’ lender that is true so that you can fight sham rent-a-bank plans. Under theР’ real loan provider doctrine, courts recognize the real lender Сњ of a possibly predatory loan once the celebration, either the lender or non-bank lender, that bears the prevalent financial curiosity about the deal. In many rent-a-bank schemes, it’s the non-bank lender who bears that interest.Р’ The doctrine permits states to show that a bank may be the loan provider in title just, and correctly, that any ensuing loans are at the mercy of state rate caps.

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