AFR Statement: House Committee Approves a Package of Wall Street Giveaways

“With the Financial CHOICE Act going nowhere, Wall Street has adopted a new strategy of flooding the zone with dozens of bills seeking to create major loopholes in financial protections for the public,” said Lisa Donner, executive director at Americans for Financial Reform. “Today the House Financial Services Committee has passed some two dozen bills as an early Christmas present to Wall Street.”

“The package includes legislation that would release the nation’s largest banks from measures to prevent a financial crisis, saving them them billions of dollars in expenses,” Donner said. “It would also allow banks and fintech firms to cooperate in new forms of payday lending, and make investment products riskier for mom-and-pop savers. And it’s all happening against the backdrop of a big proposed tax cut for Wall Street.”

The package of bills contains H.R. 3299 which has a particularly dangerous provision that would override a key court decision that prevents predatory lenders from partnering with banks to evade state interest rate limits. The decision, Madden v. Midland, involved a debt collector but has implications far beyond that industry. Details can be found here.

“The very foreseeable consequence of this bill would be to open up a flood of abusive loans as payday lenders can freely exploit ‘rent-a-bank schemes’ that have been a feature of unscrupulous predatory lenders,” said Gynnie Robnett, campaign director at Americans for Financial Reform. “This change would allow lenders to override state interest rate limits and charge triple-digit rates in states where that is currently illegal.”