EXCLUSIVE – U.S. Democratic lawmakers to bring forward resolution to overturn OCC’s true lender rule

U.S. Democratic senators will present a resolution on Thursday to overturn a Trump-era rule that defines when a bank is a “true lender,” a member of Senator Chris Van Hollen’s office told Reuters on Thursday. The Congressional Review Act resolution to overturn the measure comes after a coalition of liberal advocates called https://www.nclc.org/media-center/days-before-crucial-deadline-the-national-consumer-law-center -Join-over-300-groups-calling-for-Congress-to-repeal-the-bogus-lender-rule-which-facilitates-predatory-loan-schemes.html for lawmakers to do before a fast-approaching deadline to repeal rules introduced by regulators under the previous administration that Democrats, lawyers and attorneys believe could encourage predatory lending.

In October 2020, the Office of the Comptroller of the Currency released the rule in hopes of clarifying what regulatory regime applies when banks partner with non-banks to provide loans. The OCC said at the time that the rule clarifies a murky legal issue.

But Democrats argue it will allow predatory lenders to circumvent consumer protections and state usury laws by partnering with banks whose softer federal regulations override state rules. In January, seven US states and Washington, DC, sued the banking regulator, seeking to overturn the rule they said prevented them from enforcing state laws against interest rate exploitation.

(This story was not edited by Devdiscourse staff and is auto-generated from a syndicated feed.)