Today, Congresswoman Maxine Waters (D-CA), Chairwoman of the House Committee on Financial Services, issued the following statement regarding the Office of the Comptroller’s issuance of a final rule on interest rates on transferred loans:
“It is shameful that on his first day on the job, new Acting Comptroller Brian Brooks is already following in Comptroller Otting’s footsteps in working to undermine consumer protections during a pandemic. Earlier this month, Otting issued his rule to gut the Community Reinvestment Act, and now Brooks is picking up where he left off.
“Instead of heeding the warnings of state attorneys general from both sides of the aisle, faith leaders, and other experts and consumer advocates, this final rule opens the door for predatory lenders to engage in rent-a-bank schemes to export exorbitantly high interest rates anywhere in the country, completely throwing aside state laws that are in place to protect consumers from usury.
“The OCC should be working to ensure banks are helping consumers during this time of crisis, not promoting the exploitation of the banking system by predatory lenders to get around consumer safeguards.”
On May 18, Chairwoman Waters sent a letter to Jerome Powell, Chair of the Board of Governors of the Federal Reserve System, and Steven Mnuchin, Secretary of the U.S. Department of the Treasury, following up on conversations to ensure that the Federal Reserve and Treasury programs and facilities to respond to the COVID-19 crisis do not support predatory lenders.
On May 1, Chairwoman Waters also wrote a letter to Treasury Secretary Mnuchin and Small Business Administration (SBA) Administrator Jovita Carranza, encouraging them to deny predatory payday lenders access to Paycheck Protection Program (PPP) loans and prioritize providing loans to millions of responsible small businesses.
On February 5, Chairwoman Waters convened a full committee hearing entitled, “Rent-A-Bank Schemes and New Debt Traps: Assessing Efforts to Evade State Consumer Protections and Interest Rate Caps,” where witnesses urged regulators not to take these kind of actions to weaken protections against bank payday loans.
In August 2018, then Ranking Member Waters issued a statement warning about the Treasury Department’s dangerous recommendations about rolling back payday lending protections.