The window to reverse “rent-a-bank” schemes is closing

Source: Hannah Levintova, Mother Jones

Days before the November 2020 election, the Trump administration issued a new rule that paved the way for a surge of predatory payday lending. Now, hundreds of consumer advocates, more than two dozen Democratic and Republican state attorneys general, and numerous Democratic lawmakers are calling on Congress to roll this rule back, ahead of a fast-approaching government deadline that allows lawmakers to invalidate Trump-era regulations.

Their concern is that the “true lender” rule upends more than a century of legal precedent to make it easy for non-bank financial institutions, like payday lenders or fintech companies, to evade state-level interest limits, lending at sky-high rates and trapping low-income customers in debt.

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