Attorney General Condemns Proposal Allowing Predatory Lenders To Exploit Nation's Most Vulnerable

Posted to Applied Web NY on Wed, 02/05/2020 - 10:47

NEW YORK – New York Attorney General Letitia James today co-led a bipartisan coalition of 24 attorneys general in opposing a proposed rule by the Federal Deposit Insurance Corporation (FDIC) that would allow predatory lenders to take advantage of the state’s most vulnerable consumers. In a comment letter to the FDIC, Attorney General James and the coalition urge the commission to keep state interest rate caps — or usury laws — in place on high interest loans, and reject a new rule that would weaken regulations on payday lenders and other high-cost lending. The FDIC’s proposed rules would enable predatory lenders to circumvent the state caps through “rent-a-bank” schemes — arrangements in which banks act as lenders in name only, passing along their state law exemptions to unregulated, non-bank payday lenders. 

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