Right before leaving office, the Trump Administration finalized a rule that allows predatory payday, car title, and other lenders to make loans with interest rates that far exceed state limits.
The new rule allows predatory lenders to charge 300% interest rate or more, even where the public has voted for much lower interest rate caps. It does that by allowing these high cost lenders to essentially “rent” the charter of a national bank, and thus dodge state laws.
This makes it easier for predatory lenders to hide behind “fake lenders” and make triple digit interest rate loans to millions of people at a time when so many are struggling to make ends meet. The consequence is that more people are trapped in long-term debt that will make it harder for them to meet their basic needs, and harder for them to recover.
But we have a way to fight back. Legislation, proposed by Sens. Van Hollen and Brown along with Rep. Chuy Garcia of Illinois would rescind the Trump-era rule and reestablish states’ right to protect their residents with interest rate caps. It is critical that Congress passes this resolution in order to protect consumers across the country.