WASHINGTON, D.C. – Government watchdog Accountable.US called on Senate Leader Mitch McConnell to put consumers ahead of his special interest donors for once by not obstructing a Congressional Review Act resolution expected today to undo the final OCC “fake lender” rule allowing predatory lenders to violate state authority in all 50 states. The resolution would undo the Trump-era deregulation that let’s greedy payday lenders sidestep state interest rate caps by laundering loans through chartered banks — a scheme known as “Rent-a-Bank” – in order to charge rates of 179% or higher.
Among the companies that exploit loopholes like this is payday lender Elevate Financial which uses its partnership with Kentucky-Based Republic Bank & Trust to dodge other state’s interest rate limits and even state laws that outright ban payday loans. Elevate has originated over $1 billion in high-cost loans with an effective APR of up to 109% through their partnership with Republic Bank & Trust. McConnell has taken over $79,000 from companies and organizations profiting from Rent-A-Bank schemes, including over $36,000 from Republic Bank & Trust.
“The McConnell caucus faces a choice: either protect consumers in their states — or make their predatory lending industry donors richer by pushing more people into the debt trap as millions of Americans remain out of work. A triple digit interest payday loan is no less predatory when it’s laundered through a chartered bank, and that’s why this Trump-era special interest loophole has to go,” said Jeremy Funk, spokesman for Accountable.US. “If Senate Republicans want a fix for predatory lending, they should support a strong national interest rate cap, but otherwise don’t stand in the way of states who didn’t wait around for Washington to get its act together.”
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