News Release: Congress Must Pass Resolution to Rescind “Fake Lender” Rule that Facilitates Predatory Lending


CONTACT: Diop Harris at or (269) 209-7733

AFR joins 338 groups representing all 50 states and the District of Columbia called for Congress to support a resolution to overturn rule that fosters loans with triple-digit interest rates that evade state and voter-approved interest rate caps

Americans for Financial Reform applauds Sens. Chris Van Hollen (D-MD) and Sherrod Brown (D-OH) and Rep. Jesus “Chuy” García (IL-04) for introducing Congressional Review Act resolutions to eliminate a Trump-era regulation that took effect in December. The rushed “fake lender” rule, issued by the Office of the Comptroller of the Currency (OCC), would facilitate “rent-a-bank” schemes whereby predatory lenders launder their loans through rogue banks, which are exempt from state interest rate caps, through a superficial partnership meant to evade protections against predatory lending.

Earlier this week, Americans for Financial Reform joined a broad coalition of 338 organizations representing all 50 states and the District of Columbia calling on Congress to overturn the “fake lender” rule which would “unleash predatory lending in all fifty states.”

“Predatory lender support for this OCC rule makes clear they are not interested in following reasonable state rules that protect borrowers. Instead, they are determined to outflank state consumer protections and extract wealth from the most vulnerable consumers,” says Linda Jun, senior policy counsel for Americans for Financial Reform. “Without a federal interest rate cap, predatory lenders will continue to seek ways to preempt state interest limits in order to suck consumers into debt traps. But first, Congress must cut off this regulatory loophole meant to exploit consumers.”

As was done more than a dozen times under President Trump, this Congress could use the Congressional Review Act (CRA) to rescind recently finalized regulations, including the OCC’s “fake lender” rule. Moreover, a CRA challenge to the OCC rule would be significantly easier to pass than other non-budgetary pieces of legislation: a simple majority vote in both chambers, limited debate, no filibuster, and the president’s signature. The CRA of the OCC “fake lender” rule was introduced by Senator Sherrod Brown (D-OH) and Congressman Jesus “Chuy” García (IL-04) today, and these resolutions also must be voted upon by a certain date, currently estimated for sometime between May 10 and May 21.

The coalition of signatories to the letter consists of 338 groups, including civil rights, community, consumer, faith, housing, labor, legal services, senior rights, small business, student lending, and veterans organizations representing all 50 states and the District of Columbia. Text of the full letter can be found here. A 2-pager explanation of the “fake lender” rule is here and a brief explaining how these predatory lenders target veterans is here.