News Release: AFR Applauds Passage of Congressional Review Act Resolution Overturning Trump-Era Rule Enabling Nationwide Predatory Lending

For Immediate Release: June 24, 2021
Contact: Diop Harris at or (269) 209-7733

Vote in the House follows similar rebuke in the Senate

Washington, DC – The House today voted 218-208, in bipartisan fashion, to repeal a Trump-era regulation designed to allow lenders to evade state consumer protections on predatory lending. The vote follows the bipartisan decision in the Senate to overturn the rule.

“In the face of aggressive lobbying from the industry, members of Congress — some Republicans and all Democrats — came together to withdraw the open invitation that the Trump administration had extended to predatory lenders nationwide and restore the longstanding authority of state interest rate caps,” said Linda Jun, senior policy counsel for Americans for Financial Reform.

“This vote ends the Trump administration’s enabling of predatory lending in blatant violation of state consumer protection laws,” Jun added. “Congress now needs to take the next step and pass a federal interest rate cap to ensure that borrowers around the country have protections from high-interest loans that drag people into a cycle of debt. The Consumer Financial Protection Bureau must also restore regulatory protections against predatory loans.”

During the final days of the Trump administration, the nation’s big-bank regulator, the Office of the Comptroller of the Currency, rewrote rules in favor of predatory lenders. Its regulation allowed lenders to ignore state interest rate caps by partnering with banks, which do not have to follow state usury laws. The OCC called it the “true lender” rule; but the bank’s role in the process is merely providing a pathway to evasion for predatory lenders.

There has always been broad and robust public support for reining in predatory lenders. Polling has consistently shown that large majorities of voters across party lines support capping interest rates at 36%. Eighteen states and the District of Columbia have laws capping interest rates at or below 36%. In recent years, broad majorities of voters in Arizona, Montana, Nebraska, and South Dakota supported interest rate caps through ballot initiatives, in the face of well-financed industry campaigns against them.

A broad, bipartisan cross-section of experts and officials called on Congress to repeal the OCC rule. They include a bipartisan group of 25 state attorneys general, concerned it would effectively gut their state usury laws. The Conference of State Bank Supervisors, National Association of Consumer Credit Administrators, National Association of Federally Insured Credit Unions and many other groups also urged Congress to overturn the rule. More than 400 organizations from all 50 states and the District of Columbia joined in a letter to Congress in support of overturning the rule.