Published: November 2019

Stop banks from helping predatory payday lenders evade state regulations

More than five dozen public interest groups expressed deep concern about “rent-a-bank schemes” in letters to federal banking agencies, explaining that several nonbank consumer payday lenders have set their sights on using partnerships with banks to evade newly enacted interest rate restrictions in California.

A coalition of 61 consumer, civil rights, and community groups today sent letters to three federal bank regulators urging them not to allow their banks to help payday lenders evade state interest rate limits. The groups sent separate letters to the Federal Deposit Insurance Corp (FDIC), which regulates the only banks currently involved in rent-a-bank schemes; the Office of the Comptroller of the Currency, which regulates a national bank that has been in talks with a payday lender; and the Board of Governors of the Federal Reserve System, whose banks so far do not appear to be engaged in rent-a-bank schemes.

Other Organizations

AKPIRG | Alabama Appleseed Center for Law & Justice | Allied Progress | Americans for Financial Reform Education Fund | Berkeley Law Consumer Advocacy and Protection Society | California Low-Income Consumer Coalition | California Reinvestment Coalition | Center for Economic Integrity | Center for Responsible Lending | Community Economic Development Association of Michigan (CEDAM) | Community Legal Services, Inc. of Philadelphia | Consumer Action | Consumer Federation of America | Consumers for Auto Reliability and Safety | CoPIRG (Colorado Public Interest Research Group) | East Bay Community Law Center | Empire Justice Center | Florida Alliance for Consumer Protection | Housing and Economic Rights Advocates | Leadership Conference on Civil and Human Rights | Legal Aid Center of Southern Nevada | Legal Aid Society of the District of Columbia | Mission Asset Fund (MAF) | Metrocrest Services | National Association of Consumer Advocates | National Consumer Law Center (on behalf of its low income clients) | National Consumers League | National Fair Housing Alliance | New Economy Project | Public Justice Center | Public Law Center | Reinvestment Partners | Texas Appleseed | The Bell Policy Center | Tzedek DC | U.S. PIRG | United Way of Greater Houston | United Way of Metropolitan Dallas | Woodstock Institute

More Information

Please click here to read the coalition letter in full.

For more information, please visit AFR's website.

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